1 Top ETF to Load Up on in 2026

Market Overview - Improved market breadth has been a significant story in early 2026, with industrials, energy, and defensive sectors outperforming the S&P 500, while tech stocks are lagging behind [1] - Small-cap stocks have outperformed large-cap stocks by over 7% as of January 20, 2026 [1] Investment Strategy - Investors heavily invested in tech and the "Magnificent Seven" stocks may need to reassess their strategies due to concerns about the slowing labor market and geopolitical uncertainties [2] - The Invesco S&P 500 Equal Weight ETF offers a way to maintain large-cap exposure while diversifying into other market areas beyond tech, charging an annual fee of 0.20% [3] Concentration Issues - The equal-weight S&P 500 ETF mitigates the concentration risk associated with the "Magnificent Seven," which collectively account for approximately 35% of the S&P 500 [5] - The S&P 500 currently trades at around 22 times forward earnings, nearing its highest level since the tech bubble, while the "Magnificent Seven" stocks trade at about 27 times earnings, indicating they are priced for perfection [6] Sector Exposure - The equal-weight S&P 500 ETF has a more balanced sector exposure, with tech making up only 13% of the portfolio, compared to 16% in industrials, 15% in financials, 12% in healthcare, and 10% in consumer discretionary [8] - The shift away from tech and the "Magnificent Seven" stocks is evident, with cyclicals and small caps gaining traction as investors react to labor market concerns and geopolitical issues [9]