S&P 500 investors shifting away from mega-cap dominance
Investors in the S&P 500 are increasingly moving their capital out of dominant mega-cap stocks and into more diversified, equal-weighted portfolios. The Invesco S&P 500 Equal Weight ETF (RSP) has seen significant inflows, surpassing $100 billion in assets under management for the first time in August 2026. This shift is evident as RSP outperformed its cap-weighted counterpart, the Vanguard S&P 500 ETF (VOO), with a year-to-date return of 13.1% compared to VOO's 10%. The Magnificent Seven — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla — have underperformed in early 2026, contributing to the broader market diversification. The performance gap between these top stocks and the rest of the index has widened. In the first half of 2026, the Magnificent Seven collectively lost 1.9%, while the S&P 500 gained 9.3%. Within this group, Microsoft fell by nearly 18% year to date as of July 16, whereas Apple rose over 20%. The broader market is also showing signs of a more balanced growth story with other sectors gaining traction.
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Topics: equal-weight ETFs investor trends mega-cap stocks S&P 500