Equal-weight S&P 500 funds have lagged the standard index again, even as the AI-led rally has become more concentrated in a few tech names. Investors are being told to think beyond either/or and consider broader portfolio mixing.
01Summary
- 01Equal-weight S&P 500 funds trailed the market-weighted index again in 2026, with September marking their worst month and a loss of more than 4%.
- 02Goldman Sachs said market breadth has fallen to its lowest level since the dotcom bubble.
- 03The Kobeissi Letter found that 42 AI stocks generated 67% of the S&P 500's price return from the start of 2024.
- 04Tech now makes up about 16% of the equal-weight S&P 500, versus nearly 40% of the standard index.
- 05Todd Rosenbluth of TMX VettaFi said investors should not rely only on an equal-weight ETF, but should combine cap-weighted and equal-weight funds, or use sector and mid-cap funds for diversification.
02Why it matters
The story matters because the S&P 500 remains heavily driven by a small number of technology stocks, so a sudden turn in that trade can affect broad market exposure. It also points to ways investors may try to reduce concentration risk without abandoning large-cap US equities.
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