Invesco’s ETF Puts Rocket Fuel on the S&P 500

Core Viewpoint - The S&P 500 exhibits a concentration issue, with the top seven stocks representing about one-third of the index, leading to significant exposure for investors in a few mega-cap technology companies. The Invesco S&P 100 Equal Weight ETF (EQWL) offers an alternative by equally weighting the top 100 companies, limiting even large firms like Apple and Microsoft to approximately 1% of the portfolio [1]. Group 1: Performance of EQWL - Since its inception in December 2006, EQWL has achieved a return of 271% over the past decade, outperforming the market-cap weighted SPDR S&P 500 ETF Trust (SPY), which returned 234%, resulting in a 37 percentage point advantage [2]. - In the past year, EQWL gained 18.84%, compared to SPY's 17.34%, and has increased by 1.07% in early 2026, while SPY has only gained 0.85% [2][3]. - The strategy of EQWL involves quarterly rebalancing, which systematically trims high-performing stocks and adds to underperformers to maintain equal weights [3]. Group 2: Market Dynamics - Early 2026 indicators suggest a potential market rotation, as small-cap stocks have gained 2.67% year-to-date, while the tech-heavy Invesco QQQ Trust (QQQ) has only increased by 0.60% [5]. - Equal-weight strategies tend to perform better when market leadership expands beyond mega-cap stocks, indicating a shift in investor focus towards broader market exposure [5]. - Historical data indicates that equal-weight versions of the S&P 500 have outperformed their market-cap weighted counterparts by an average of 1.05% annually over multi-decade periods [6].