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Tag Archives: equal weight

Feb 22, 2024

Magnificent Mid Caps and Sensational Small Caps

U.S. equities rose in 2023, with the mega-cap “Magnificent Seven” driving most of the S&P Composite 1500®’s 25% gain. While mega caps continued to outperform in January 2024, not all seven of the aforementioned group ranked highly. This has led to some market commentators looking to coin new phrases: “Sensational Six” or “Super Six” (the…

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Nov 20, 2023

An Elevating Effect on Equal Weight?

The trouncing of smaller caps by mega-cap stocks has been one of the hallmark market themes of this year, with the S&P 500® Top 50 outpacing the S&P SmallCap 600® by 30% YTD.1 As a result of its inherent small-cap bias, the S&P 500 Equal Weight Index (EWI) has suffered accordingly, underperforming the S&P 500…

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Jul 27, 2023

Mean Reversion

Over more than 20 years of live history, the S&P 500® Equal Weight Index has outperformed the S&P 500 by a substantial margin. Between Dec. 31, 1990, and June 30, 2023, Equal Weight’s compound annual growth rate was 11.82%, well ahead of the cap-weighted S&P 500 at 10.55%. This performance edge is a product of…

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Jul 12, 2023

Towering Tech

The performance of large-cap Technology stocks so far this year has been exceptional, with the S&P 500® Information Technology sector outperforming the S&P 500 by 26% over the six-month period ending June 30, 2023—the 97th percentile of all observations in our database. Tech’s outperformance, driven by mega-cap strength, has been especially notable because of its…

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May 1, 2023

Lessons from 20 Years of Equal Weight

How has equal-weight compared with cap-weight historically? S&P DJI’s Hamish Preston and Invesco’s Nick Kalivas explore how differences in index construction have influenced index performance, sector and factor composition, and results in the latest SPIVA Scorecards.

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Apr 26, 2023

Equally Weighting within Sectors: Impact and Potential Applications

The outperformance of equal weight indices is well documented, especially for the S&P 500® Equal Weight Index’s 20 years of live history. Equal Weight’s relative returns reflect the impact of several important index characteristics. For example, smaller-size exposure and (anti-) momentum effects together account for around 75% of the historical variation of its relative returns….

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Jan 9, 2023

Celebrating 20 Years of the S&P 500 Equal Weight Index

The S&P 500® Equal Weight Index launched on Jan. 8, 2003, so Sunday marked 20 years since the index first allowed investors to measure the performance of egalitarian allocations among S&P 500 constituents. The index is now tracked by various investment products globally, and it has potential benchmarking applications. Exhibit 1 shows that the S&P…

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Nov 10, 2022

Examining Equal Weight

In this tumultuous market characterized by Fed rate hikes, elevated inflation and a strong dollar, mega-cap growth companies have suffered heavy losses, paced by recent “Big Tech” earnings disappointments from Meta, Microsoft, Alphabet, Amazon and others. The S&P 500® Top 50 declined by 19% over the past 12 months, underperforming the S&P 500 by 5%….

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Nov 9, 2022

Watch Your Weighting Scheme

2022 has witnessed a recalibration across financial markets, as investors have digested the impact of higher interest rates amid elevated inflation. Despite bouts of optimism that the U.S. Federal Reserve would take a more dovish stance, and better-than-expected corporate earnings, Exhibit 1 shows that the vast majority of large-, mid- and small-cap indices declined through…

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Jul 7, 2022

Tumultuous Trends

The S&P 500® posted its worst first-half performance since 1970,1 as inflation concerns, Fed rate hikes and slowing economic growth have weighed on markets. Mega caps were hit particularly hard, with the S&P 500 Top 50 posting a loss of 22%, underperforming the S&P 500 by 2%. Exhibit 1 shows that Information Technology was the…

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