Unpacking a Decade of Disparate S&P 500 ETF Returns
The Underlying Similarity: Two Funds, One Benchmark
Two exchange-traded funds, SPDR Portfolio S&P 500 ETF (SPYM) and Invesco S&P 500 Equal Weight ETF (RSP), both track the S&P 500 index. Fundamentally, they invest in the same large American corporations. However, the critical distinction lies in how they allocate their holdings, a factor that has profoundly impacted their trajectories over the past ten years.
Performance Metrics: A Decade Apart
As of September 23, 2026, SPYM traded at $91.12 and RSP at $212.70. A direct comparison of their returns over various periods reveals a consistent outperformance by SPYM:
- 1 Month: SPYM +1.37%, RSP -3.69%
- Year to Date: SPYM +14.49%, RSP +12.36%
- 1 Year: SPYM +17.43%, RSP +14.64%
- 5 Years: SPYM +87.37%, RSP +50.52%
- 10 Years: SPYM +322.64%, RSP +202.99%
This data clearly demonstrates SPYM's lead, with the gap expanding significantly over longer durations.
The Mechanism of SPYM's Dominance: Capitalization Weighting
SPYM employs a market capitalization-weighted approach, meaning companies with larger market values exert a greater influence on the fund's overall performance. For instance, as of June 30, 2026, Apple alone constituted 6.59% of SPYM's net assets, while Amazon and Alphabet also held substantial weight. This structure has been particularly advantageous in a decade characterized by the meteoric rise of a few mega-cap technology and platform giants. As these leading companies grew, SPYM automatically increased its exposure to them, amplifying its returns. This also means that, despite appearing diversified, SPYM's performance is heavily concentrated in a small number of top holdings.
RSP's Design Philosophy: Equal Weighting and Broader Exposure
In contrast, RSP tracks the S&P 500 Equal Weight Index, assigning approximately the same weight to every company within the S&P 500, regardless of market capitalization. This strategy intentionally reduces the influence of mega-cap technology firms and enhances exposure to sectors like industrials, financials, materials, and real estate. While this design resulted in RSP trailing SPYM during a period dominated by large tech companies, it offers a more genuinely diversified portfolio. RSP also provides consistent income through distributions, having made 93 quarterly payments, with a trailing 12-month total of $3.18 as of September 21, 2026.
Investment Implications: Tailoring Your S&P 500 Exposure
For investors seeking direct exposure to the S&P 500 as it currently exists—heavily weighted towards leading technology firms—SPYM remains a compelling choice. Its structure naturally capitalizes on the growth of market leaders. However, for those prioritizing broader diversification across the entire spectrum of 500 companies and willing to accept periods of underperformance relative to the cap-weighted index, RSP presents a viable alternative. The key decision hinges on whether an investor desires a concentrated bet on market giants or a more evenly distributed investment across the index, with the understanding that a shift away from mega-cap dominance could alter future performance dynamics.
