Is the Invesco S&P 500 Equal Weight ETF a Better Buy Than an S&P 500 ETF?

Core Insights - The SPDR S&P 500 ETF was the first ETF and has become a significant product category, with the Invesco S&P 500 Equal Weight ETF being highlighted as a better-performing variant for long-term investors [1][8]. Group 1: S&P 500 Index Overview - The S&P 500 index is designed to represent the U.S. economy, with stocks selected by a committee rather than tracking the market directly [2]. - Stocks in the S&P 500 are market-cap weighted, meaning larger companies have a greater impact on the index's performance [3]. Group 2: Historical Performance - Historically, investing in the S&P 500 index has proven beneficial over time, even when purchased at market peaks [5]. - Major downturns, such as the dot-com crash and the Great Recession, are viewed as minor blips in the overall upward trend of the S&P 500 index [6]. Group 3: Invesco S&P 500 Equal Weight ETF - The Invesco S&P 500 Equal Weight ETF holds the same stocks as the S&P 500 index but weights them equally, giving each stock the same impact on performance [9]. - Equal weighting addresses issues of market-cap weighting, such as overexposure to hot sectors during bull markets and underrepresentation of smaller, faster-growing companies [10][12]. - The Invesco S&P 500 Equal Weight ETF typically offers a higher yield compared to market-cap weighted ETFs, enhancing overall portfolio yield by approximately 30 basis points [13]. Group 4: Performance Comparison - The Invesco S&P 500 Equal Weight ETF has outperformed the SPDR S&P 500 ETF on both price-only and total-return bases, making it a preferable choice for passive long-term investors [14][15].