RSP

Alone_Owl8485

Its already happening. The equal weighted SP index (RSP) and Dow-Jones (DJI) have been going down since late July and early Aug. The only thing holding the market up is the next round of tech earnings, right before the election. Watch for the rush to the exits after that.

swolebird

AI advisor actually advised that since I'm heavy on tech, maybe consider RSP to diversify away from the top 10.

VoidMageZero

Yeah I have RSP but it’s been underperforming over like the last month at least

CurrentAirline9065

This place turning ultra ghey bear on the day SPX finally makes a new ATH and RSP regains it's 20 day. Let's fucking rocket

CurrentAirline9065

$RSP regained it's 20 day SMA today and memory is cheap kinda wanna jump back in

CurrentAirline9065

$RSP did regain its 20 day today 🧐

Bluecoregamming

I'm still coping the RSP is not ATH yet, therefore there is still opportunities left. We didn't miss the bull run yet (cope)

Own-Recipe5908

If bonds cool off for a few days I could see another push for broadening. SPYD and RSP got beat up last month but they could have a comeback.

sharp315

SpaceX is running at a net loss and Anthropic is not a public company so I am not sure why you are using those as examples. the RSP equal weight is up 10.8% over 1 year and 39.3% over 5. clearly there is growth outside the tech sector. the healthcare sector is having an incredible year. the energy sector is up big for obvious reasons. financials had a really nice run up in Q1 and Q2. industrials and materials sectors are both doing double digits this year. yes there is still concentration in tech but the market is absolutely broadening and has been for a long time. you talk about bailouts but software giants like Oracle and Adobe have been getting completely eviscerated with no government intervention is sight - so what gives?

CornerOne238

What? RSP is up 10% over last year

jadepig

You sure about that? Without doing deeper research, my interpretation of “weighted” means 1k into SPX sends more to NVDA since it’s bigger. My interpretation of “unweighted” RSP is that 1k into that sends $2 to NVDA and every other equity in it. 

triSCAREatops

RSP isn’t SP490. It is equal weight SP500

Dubious-WhyAmIHere

The reason the S&P 500 disconnected from traditional macro indicators like crude, rates, and credit spreads is structural: the relentless automated passive inflow flywheel. Every two weeks, millions of automated 401(k) contributions and retail DCA accounts buy cap-weighted funds (VOO, SPY, IVV) completely price-inelastic. For every $1 that enters the index, roughly 34 cents is funneled directly into the top 10 mega-caps, regardless of whether the 10-year yield is at 3.5% or 4.5%. That mechanical buying pressure has insulated the top 10 from macro gravity, which in turn masks the macro reality of the other 490 companies. If you want to see where the macro risk actually went, look at the spread between cap-weighted SPY and equal-weighted RSP: - The top 10 tech names trade at forward multiples between 32x and 45x. - The S&P 490 (via RSP) is trading closer to 17x forward earnings—meaning the broader economy has already priced in higher borrowing costs and margin compression. To answer your question on whether this creates a stock-picker's market: Yes, but with one critical caveat: the correlation shock. There are incredible fundamental value opportunities right now in cash-generative industrials, financials, healthcare, and infrastructure that have been completely ignored by the momentum trade. However, if and when the AI mega-caps finally re-rate lower, they won't sell off in a vacuum. Because they dominate the major indices and ETF liquidity, a violent drop in the top 10 triggers margin calls, ETF redemptions, and risk-parity de-grossing that temporarily drags down non-AI value stocks with it. The playbook here isn't trying to time a rotation, it's using this disconnect to steadily build positions in high-free-cash-flow, low-debt businesses trading at 12x to 16x earnings, while keeping dry powder ready for the day passive index selling drags the babies out with the bathwater.

Own-Recipe5908

RSP is down over the last month.

Sufficient_Habit5091

You know, many of us are invested just not as over concentrated as you may be. A good number are RSP or even international like I am.

_Clit-Commander_

Yeah I mean just look at the equal weight index RSP, falling for 17 days straight. So literally the only thing propping up this market is big tech stocks. Problem for bears is bulls are morons with infinite money and will just buy no matter what. Can’t stop that kind of buy the dip wave, plus you add in the regular non degenerate people who just buy in the 401ks and we will never see a big crash ever again.

Own-Recipe5908

If you want to feel something put half in either spyu or tqqq. If you want to diversify and be boring, SPYD or RSP.

dailyticker_j

Yeah, that’s what caught my attention too. If RSP follows through, breadth could improve pretty quickly. Definitely worth watching.

Chart-trader

Small caps bounced from 200 day average this week. RSP came close. The setup is there.

Not_Sure_68

...and that I think perfectly sums up the danger with equities. People are entirely too complacent imo. Auto buys on SPY are creating a monster where the S & P 500 has effectively been transformed into nasdaq lite. In essence, due to market cap weighting, the S & P 500 has effectively been transformed into the S & P 7 ...or even the S & P 5. The vast majority of the broader market is being starved for investment while a few tech names suck all the air out of the room. Once can see this easily by simply comparing the SPY to the equally weighted index(RSP). Also rate sensitive sectors of the S & P are getting taken apart. Just have a look at XLU, XLF, and/or XLRE. That is utilities, financials, and real estate respectively. ...it's turning into a bloodbath even as the index continues higher as though there's not a care in the world.

Not_Sure_68

100%. Right this second SPY is up .72% on the notion that bad job numbers should reduce chances of more fed funds increases...but RSP(the equal weighted S & P), is up less than half of that(.34%). This is because the bloated tech portion of SPY is dragging the index higher despite most of the components falling. This weighting of the SPY is masking a great deal of risk. When the leadership of the S & P finally roll over, the fall is going to be shocking for many...because they never bother looking under the hood.

Sufficient_Habit5091

SPY down -0.19%. RSP +0.2% green actually. Imagine how investors addicted to endless green gonna react if we ever have a healthy correction.

Ok-Replacement9164

RSP

multiple4

RSP is cool if you want less money in a few companies. It's the SP500 but equally weighted across all the companies

Bman282828

Time to buy RSP

CanYouPleaseChill

RSP (S&P 500 Equal-Weight)

URMomPaysFirMyCalls

RSP closing in on the 200dma. Where’s the bull market 🥭

VoidMageZero

I also bought the wrong ETF (RSP)

URMomPaysFirMyCalls

RSP -.20%. Bull market?

Natarian86

RSP is negative and we're acting like this is a raging bull market lol

GenesGeniesJeans

IG credit spread .83, HY credit spread 3.02… RSP/SPY at a bottom, Nasdaq AD ratio at 0.66… USD/JPY falling… ignore all that, PCE is only 3.3

gardeal23

While I don’t disagree with the initial “it’s gone up to far too fast”. The setup wasn’t there. You have a company with a major game changing catalyst + they are a staple blue chip. Given that the economy is tightening (money is flowing out of broad market small mid caps, into blue chips look up RSP/SPY) you picked a rough timing to do this. You also picked a horrible expiration. If you gave it like 2-3 months, you’d have a way better chance, but 1DTE is just diabolical

JayRoo83

Good to see RSP trying, I'm fine with some rotation

Sea_Local2557

mainly ITA, RSP and MCD

Agitated_Medium5844

I would be taking less aggressive stance. Maybe switch to a more the Roth to something like 40 SHY 60 RSP . This would give you some room to buy when the market is off. RSP offers equal weighting S&P so you don’t take as big of hit when tech sells off. The levers you can pull during a selloff with 40% cash vs zero make it worth it.

Own-Recipe5908

Dip buying is now in megacap and SOXX. Was decent bit more up on my SPYD and RSP before this month, pain is real.

IvoryTowerResident

on the week but overall RSP having a good year

95Daphne

Fwiw on the month: RSP -4.3% IWM -4.1% While the S&P and Nasdaq are green and the VIX is tame. It's as I said. There is stuff you can do to play it bearishly, but the games don't really have a shot at starting until it's the Nasdaq lagging, and the Nasdaq continues to not act on the 2022/parts of 2021 rules, it's other stuff that gets weighted down first on rate moves like this.

95Daphne

Idk why this has been downvoted because it's true that the equal weight S&P has been struggling this month. It's also currently truer than ever that you're going to need to switch to the Nasdaq/tech lagging for the games to possibly begin though. Vol is off the lows of the month, but we're at VIX 15 while the RSP is down 4.1% on the month. It shows that this narrow breadth is fine for markets.

STOPbuyingPUTS

That concentration of the top names is the reason for the gains. You can buy the equal weight S&P ticker RSP if you’re truly concerned.

Persun01

Spy up 12% ytd RSP up 9% ytd 🤏🤐

FunFactTidbits

There's lower cost (expense ratio) like VOO (Vanguard). Over time the expenses eat into your earnings. Be aware of the holdings. The Mega cap stocks are heavily weighted in both while the RSP is equally weighted (also a high expense ratio). Don't know if Vanguard has something that mimics. Generally, Dollar Cost Averaging (DCA) is best. If in a taxable account try to hold for at least a year so it will be taxed as long-term Capital Gains (lower tax rate) vs Income. Good luck Note: I am no a fiduciary

deadfishlog

Always interesting to measure SPY/VOO vs RSP (S&P 500 equal weight). The RSP equal weight is down 1% over the past week.

IvoryTowerResident

Chill we are barely off all time high for the RSP

impulse07

Interestingly, RSP Equal Weight S&P 500 index has been selling off. I'm not sure what means. I do know that few stocks I own are ripping, and others are down.

Individual_Limit_701

Relying on RSP (equal weight) versus SPY divergence is the best reality check. When net new 52-week lows outpace highs at index peaks, distribution is quietly taking place under the surface of passive inflows

PutSpreadDaddi69

RSP and IWM tell me everything I need to know about this rally

IvoryTowerResident

RSP is up 10% on the year. No problems there

SirGlass

If you are worried about SPX being too top heavy or too exposed to tech there are much better solution than RSP or buying all 500 stocks Here are better solutions. Add mid cap / small cap allocation Add foreign allocation. Add a value index fund.

QuanTradin

At 5% and only touching the ones that go really wide, you're not tracking equal weight any more, you're just holding a basket you like. Which is fine, it's only a different thing than RSP.

user4443337

By the way though, equal-weighted SPX funds aren’t great representations of the market. If you know Ben Felix he has a video about RSP, very trustworthy and research/evidence based YouTuber/podcaster. I highly recommend his videos. They usually underperform and I think there’s better ways to diversify or lean into small/mid caps. IE if you want to reduce technology, add some international or a small/mid cap value fund. If you want to overweight a specific sector for diversification, then add the sector fund. I just believe equal weighting 500 stocks puts too much weight into no-name and random mid cap companies. Cap weighted is a more accurate representation of the market and automatically uses momentum, which is a documented factor that has performed well throughout history. Equal weighting is the opposite of momentum trading.

Newbiewhitekicks

I can’t tell if this person is being serious. Everything they wrote is dump, including picking RSP versus an S&P index with a normal ER.

QuanTradin

the fees aren't the thing that gets you here, the rebalancing is. RSP resets quarterly, and doing that by hand across 500 names means hundreds of trades a year, plus the drift between your rebalances is exactly the equal weight tilt you were trying to capture in the first place. the Mag 7 or Dow version is genuinely fine though. 7 or 30 names you can actually keep honest without it turning into a second job.

Overall_Youth_1761

I get the appeal of tinkering with it yourself, but do the math before you commit: RSP charges 0.20%, so on $5,000 you're paying about $10 a year. That's your entire savings, and in exchange you have to track 500 positions that drift constantly since winners grow faster than the rest. If you really want to do it, do it in an IRA, because rebalancing that many names in a taxable account is a capital gains mess. Otherwise just buy RSP and spend the fiddling time on something else.

user4443337

No way RSP is 0.02%. Says 0.20% on the Invesco website. https://www.invesco.com/us/en/financial-products/etfs/invesco-sp-500-equal-weight-etf.html

GamblingMikkee

S&P 500 equal weight $RSP as usual always red or shit

Kpints

OP, have had this feeling a long time, executed a rotation a few days ago out of VOO and significantly trimmed my RSP. Rotated the money I needed into SGOV as a structural de-risk, VXUS, and (since I'm Canadian) I have a big chunk in XIU and XEQT. I'm also holding a bunch of AVGE but I view this as temporary (huge US tilt that I don't want, covered by my remaining RSP) but it's globally diversified with factor tilts and I'm using it to maintain exposure while I figure out what to do with that chunk of money since it's in USD

MechanicalDan1

Midcaps and small caps have pulled back slightly, and equal weights EDOW, RSP, QQQE. PE compression. Watching for a rebound.

Vlisa

RSP green 🥱

music_is_gud

Uhhh RSP is not up?

CurrentAirline9065

I would be do playing a big bounce this week but the $RSP dying has me scared

CD274

You guys know all sectors are up but tech, qqq. Spy is down but RSP is up.

CD274

RSP is up, same rotation shit that's been happening for months

VotedOut

S&P 500 equal weight (RSP) and Russell 2000 mid-caps (IWM) are grinding down, while SPY and QQQ are holding up somewhat more. Now even big corporations get to be on the poor end of the K-shaped economy. The only people that get to be at the top are the executives at the 20 or so mega-cap techs that grift everyone the hardest.

Potential-Menu3623

I heard today breadth is deteriorating and tech is going up, SPY is now better than RSP, at least into midterms

charlesleestewart

My financial advisor just got me into that one. It sounds pretty good if they manage it properly. My favorite way to invest in the S&P is with RSP the equally weighted ETF fund. It has a much more stable returns because it isn't distorted by those hot money big caps like NVDA. The OP is correct, the rise of index funds in the public's passivity and just sticking with them results in passive inflows into companies with farcical valuations like SpaceX (yes, I know that one isn't in SPX but it is in QQQ). As for the fact that many of the constituent companies are immoral and unethical, that's kind of a moot point and it's nothing new. This is capitalism, the bottom line rules.

lukify

Equal-weight SP500 ETF $RSP is barely outperforming $VOO YTD, but $VOO still has lower fees.

DigitalArbitrage

RSP has a slightly higher price volatility than VOO. However VOO has a lot more single-stock risk, because more of the investment is in a few companies.  47% of VOO is tech companies for example!  Ultimately the reason I own some index funds is because I want to diversify away from having too much exposure to a single company. That's why RSP makes more sense to me than VOO/SPY.

DigitalArbitrage

I like the equal weight index (e.g. RSP), because I feel like it is lower risk.

Chonan_Akira

And the S&P 500 is very concentrated now. An equal-weighted ETF like RSP can reduce the concentration risk. Equal-weighted used to outperform cap-weighted S&P 500 ETFs. They haven't done so in the last couple of years so they are out of favor and downvoted here.

Chonan_Akira

Isn't RSP ahead of VOO/SPY so far YTD? We may be seeing a correction back to the mean.

95Daphne

If that ridiculous burst by the SOXX off the spring lows doesn’t occur, the Nasdaq is probably at least a couple thousand points lower, but with the way the Dow and RSP is looking, it likely doesn’t fully translate there. You’ve even seen the S&P 600 A/D line make new ATHs recently while semis are back on the struggle bus. Put simply, this is annoying PA, but we’ve seen worse in 2022 and it’s nothing that is new unless you’re new-ish to markets (which I am admittedly to an extent). You’re going to need a new “and another thing” to take everything with it. Wasn’t a fan of yesterday personally, but markets are safe for now with those kind of splits.

Ox29A

Didn't RSP beat SPY YTD ?

jetpilot6969

when I saw RSP green on the spy dump at the open....this tingled my nuts

Jaredthegoat_

sector rotation is happening out of the Qs, but RSP is steady, today's looking like a choppy chop

Unable_Plane1948

Four $350 tickets from January 2017 is one path. That window was a historic win for mega-cap market-weight, so RSP and RPV were supposed to lose. This sample kills the 2017 timestamp, not factors.

harrison_wintergreen

This is interesting and I applaud investing your own money for the test. However, the 'beware' in the title is misguided. - you didn't lose money with any of those ETFs, at least in nominal terms. - you didn't know in 2017 what would happen by 2026. - that last ~9 years don't predict the next 10 years, and the last ~9 years may or may not be typical. from 2003 to 2013, RSP outperformed SPY by a wide margin. https://imgur.com/a/v4Uow9Z - SPY is not necessarily an appropriate control or benchmark for all those ETFs. for example QUAL uses the MSCI USA Sector Neutral Quality Index as a benchmark, not the S&P 500. Comparing every investment on the planet to SPY/VOO is a common error I see on reddit. - as others mentioned, some of the ETFs may have smaller drawdowns -- which certain investors might prefer. some of those ETFs might also have higher dividend income potential, which is also a perfectly valid strategy for those who want it.

RZimmerDylanB

I'm also concerned about a looming AI bubble burst. My best educated guess is that it won't happen until early 2027 at the earliest, but the Trump Effect could postpone it until the end of his presidency...Nevertheless, it's probably not a good idea to risk it all at a late stage. When considering my alternatives for my IRA, AI told me to move my money into RSP instead of staying in VTI, stating the following: Why RSP Will Grow While Tech Rots 1. **Earnings Insulated from AI:** If Nvidia or Microsoft drops 40% because their AI profit margins compress, it does not change how many tractors Caterpillar sells, how many planes Union Pacific moves, or how much revenue JPMorgan generates. RSP's growth is driven by these tangible corporate earnings, which remain highly insulated from tech valuations. 2. **Deep Valuation Safety Net:** Right now, the tech-heavy S&P 500 is trading at a dangerous forward P/E ratio over 25x. RSP is trading at a steep historical discount—roughly **17x to 18x forward earnings**. Because RSP is already priced fairly, it has very little valuation "air" to let out, giving it a much firmer floor during a downturn. 3. **The 3-Year Recovery Math:** Historically, when concentrated market bubbles burst (like the 2000 Dot-Com crash), equal-weight and value strategies dramatically outperform. While it took the tech-heavy Nasdaq **15 years** to recover its losses after 2000, equal-weight portfolios broke even and moved into positive, double-digit growth within **24 to 36 months**.

collegefootballfan69

No because of mag 7 will be flat for years buy RSP

Vlisa

Need to buy and hold some RSP to detox

TrueCapitalism

Being heavy in RSP instead of S&P500 will definitely limit your drawdown when the "bubble pops," but until then, your position will likewise not grow as much.

CD274

RSP too

GrokM14232

RSP isn’t just “more diversified”; it’s a persistent tilt toward smaller companies and value, plus a systematic rebalance away from winners. That can outperform when breadth widens or the rate cycle turns, but it can lag for years when mega-cap earnings dominate, as it did through much of the post-2019 period. Fwiw, 20% to 30% RSP alongside VTI is enough to reduce concentration on the margin without making your retirement allocation a big regime bet.

CovTaude588

I’d keep VTI as the core and only add something like 20% RSP if the concentration genuinely bothers you. Equal weighting adds a size tilt, more turnover and higher fees, so it isn’t simply a safer version of VOO. A 60/40 split feels like a fairly large bet on that method, imo.

FreedK70980

I think the main question is whether you want a permanent small-company and value tilt, since RSP isn't just VTI with less tech. A 60% VTI / 40% RSP mix seems like a pretty large active bet for someone mainly trying to index, especially given RSP's higher turnover and expense ratio. fwiw I'd pick a modest allocation I could hold through a decade of underperformance rather than size it around the current tech concentration.

BeuTaude588

RSP is a factor tilt, not simply extra diversification; it adds smaller-company exposure, more turnover and periodic rebalancing. I’d keep VTI as the core and, if concentration still bothers you, cap RSP at 20% and reset it quarterly. In a taxable account, check the capital-gains bill before moving anything.

DanTaude599

Fwiw, 40% RSP is a pretty large active tilt, not just extra diversification, and its higher turnover and expense ratio matter. I’d keep VTI as the core and, if concentration keeps you up at night, cap RSP around 10-20% and rebalance once a year rather than guessing which kind of downturn comes next.

Moldovah

Pretty sure from like 2000 until a couple of years ago, RSP was outperforming the cap-weighted S&P.

steady_compounder

If you are worried about concentration, I would think in terms of what exposure you want to add rather than just swapping one wrapper for another. RSP reduces mega-cap dominance, but it also changes the factor mix and usually comes with a higher fee. A small tilt can make sense, but I would not assume equal weight is automatically the safer version of VTI.

YourChildhood5762

RSP has served me very well this year, especially during the April correction and the June tech meltdown. I have 45% in it. I have 5% XLG so that I don't miss out entirely on those MAG7 riches. It's done well this year (within 2% of VTI and VOO) but 100% would be too much. It's down 20 points to VTI over five years. I don't see the point of balancing it against VTI or VOO. If AI crashes, RSP won't go down as much but it will still go down because those all cover the broad market. I have RSP as protection against a dominant sector correction, but I play it against themes and sectors that are counter to whatever is the dominant risk. So if AI crashed, RSP would go down less and my other holdings would pick up the slack. If you're just going to go VTI / RSP and a little bit of VXUS, I think you're better off just accepting the risk in VTI.

mrmrmrj

Just be aware the fee is higher. There is little reason to split between RSP and VTI. You are massively over diversified. If you think it is unwise to go 100% RSP then don't bother owning it at all. You are either comfortable with mkt cap weightings or you are not.

drazayn99

Might need to move all my money to JEPI, VDC, RSP and PFIX.

deadfishlog

If you’re worried about that switch to RSP from VOO or split the difference

growerdan

Everyone here thinks SPY is so high because of tech. Has anyone looked at RSP? The equally weighted version of SPY that is outperforming it by 3%

Jaredthegoat_

RSP has been slowly going up, so SPY will probably bounce till EOD

co_co_a

| Period | SPY | RSP | Difference (RSP - SPY) | | 6 Months | +11.95% | +9.36% | -2.60% | | YTD | +13.60% | +16.15% | +2.55% | | 1 Year | +22.52% | +22.88% | +0.36% | | 2 Years | +47.99% | +36.84% | -11.16% | | 5 Years | +86.24% | +55.31% | -30.94% | Using total return performance comparisons including dividends with SPY and RSP, the equal-weight S&P 500 has outperformed the cap-weighted version YTD. However, over a period of more than two years, SPY has dramatically outperformed RSP due to the dominance of mega-cap stocks. It's also important to note that RSP has a higher expense ratio (0.20% vs 0.09%) and has historically underperformed during periods of concentrated tech stocks. The key question going forward is whether this represents a sustainable regime shift or a temporary rotation.

noobelore

If you have that money in RSP you would even have noticed the last drawdown. The over all market is very strong, earnings are once again killing it.

CD274

Oh and also, sidenote. RSP has been outperforming VOO and SPY, it's the equal weighted SP500 vs weighted towards megacaps. This isn't normal but it is this year. It has a high expense ratio. I personally switched over to RSP but I trade daily and watch everything closely. VOO is still better to buy and hold and not look for year

IvoryTowerResident

RSP close near all time high as well. Seems like a good signal for market breadth then. QQQ is still off of ATH so it is not just a tech market. What other evidence do you want to see?

IvoryTowerResident

>But beneath the surface, leadership has narrowed. Over the past five trading days, the S&P 500 gained 5.8%, while the equal-weight S&P 500 ETF (RSP) fell 1.9%. That means the average large-cap stock actually underperformed, with a handful of mega-cap names doing most of the lifting. What are you talking about RSP is at ATH while the SPY is not. Breadth is much better than the SMH rally of April - June. Market is healing and we are in a broader bull market