Why Is the Equal-Weight S&P 500 Lagging the Regular S&P 500?
Direct answer
Concentration in SPY (Nov 9, 2026)
Because the regular S&P 500 is weighted by market value, so a handful of giant companies, mostly in technology, drive its return, while the equal-weight version gives each of its roughly 500 companies about 0.2% at every quarterly rebalance. When the biggest stocks outrun the average stock, as they did through much of 2023–2025, cap weight wins. In SPY's holdings on November 9, 2026, the 10 largest companies made up 38.9% of the fund, against about 2% in an equal-weight index. The gap is not permanent: equal weight was ahead for parts of 2026, and it pulled ahead when the largest stocks fell in 2022.
- Top 10 companies: 38.9% of the fund
- Apple alone: 7.86%, about the same as the smallest ~237 companies combined
- Top 50 companies: 62.9%
- Equal-weight index: each company about 0.2% at each quarterly rebalance
- Equal weight led cap weight in early and mid 2026, per published total returns
Two funds hold the same 500 companies and end up with very different returns. The only difference is how much of each company they own. That single choice decides who wins in a given year.
What people on X are asking
In October 2026 one markets account reported that the equal-weight S&P 500 was lagging the regular index by the widest margin in more than 24 years, comparing it with the dot-com boom. In January 2026 a well-followed analyst asked whether the average stock would finally outperform in 2026, with equal weight up 3.3% and SPY up 1.8% in the first two weeks. And back in February 2024 a news account noted market breadth at its weakest since 2009 as equal weight trailed. We could not check the exact "24 years" measure, which depends on the window used.
What people in the thread said
- @TheFilingSays said SPY's holdings on October 5 showed Nvidia alone at 8.63%, about equal to the smallest 260 companies combined. In the November 9 file we downloaded, the largest holding was Apple at 7.86%, roughly equal to the smallest ~237 companies; the point stands, though the names and numbers move daily.
- @thehedgeberg noted that last time the gap closed because the big names fell, not because small ones caught up. FRED data for 2022 fit that: the Nasdaq-100 fell 33% while the Dow fell 9%.
- @ricci_nov added that equal weight beat cap weight by a wide margin from 2000 to about 2007. We have not verified the size of that lead.
These are community comments, summarised in our words; the data and sources below come first.
The fact-checked answer
How the two indices are built. S&P Dow Jones Indices describes the S&P 500 Equal Weight Index as holding the same constituents as the S&P 500, with each company allocated a fixed weight of 0.2% at each quarterly rebalance. Between rebalances, winners grow and losers shrink, then the index sells winners and buys losers to reset. The regular index never resets: a company that doubles simply has double the weight.
How concentrated is the regular S&P 500? SPY holdings, November 9, 2026
Computed by UXS from State Street's SPY daily holdings file (as of Nov 9, 2026), combining share classes such as Alphabet A and C. SPY tracks the S&P 500; small differences are due to cash and fund mechanics. Tap a column header to sort.
| Largest company (Apple) | 7.86% | About 0.2% |
| Top 5 companies | 29.4% | About 1% |
| Top 10 companies | 38.9% | About 2% |
| Top 50 companies | 62.9% | About 10% |
| Smallest ~237 companies combined | About 7.9% | About 47% |
Why equal weight lagged. When a few huge companies rise faster than the rest, the cap-weighted index captures it in full while equal weight captures only 0.2% per name and keeps trimming the winners. From 2023 to 2025, artificial intelligence spending lifted the largest technology companies far more than the typical stock, so cap weight pulled ahead.
UXS decision diagram
Which index wins this year?
Text version of the diagram
- Are the 10 largest companies rising faster than the median stock? If no: Equal weight tends to lead
- Is market breadth narrow (few stocks making new highs)? If no: The gap usually stays small
- Are mega-cap valuations still rising? If no: Watch for mean reversion; equal weight can catch up
- Otherwise: Cap weight tends to lead, sometimes by a wide margin
Diagram drawn by UXS. A simplified decision aid for education, not a recommendation.
It turns. In 2022 the largest growth stocks fell hardest as rates rose, and the Nasdaq-100 dropped about 33% while the Dow fell about 9%. In 2026 the pattern partly reversed again: Kiplinger reported that through August 28, 2026 the S&P 500 had returned 13% with dividends while the equal-weight index was up more than 16%. A wide multi-year gap and a single year of catch-up can both be true at the same time.
Which should you own? Neither is "right". Cap weight is cheaper to run and reflects the market as it is. Equal weight is a deliberate tilt toward smaller members and value, with higher turnover. Our pages on market breadth, the S&P 500 vs a total market fund and how much of the S&P 500 is in the top 10 help frame that choice.
Decision helper
| If you believe | Tilt toward |
|---|---|
| Mega-caps keep earning more than everyone else | Cap weight |
| Leadership broadens to the average company | Equal weight |
| You do not know | Cap weight core, small equal-weight sleeve |
| You want lower fees and turnover | Cap weight |
Related reading: what it takes to join the S&P 500, S&P 500 vs Nasdaq-100 and the average S&P 500 return over 10 years.
Common mistakes
- Assuming an S&P 500 fund is diversified evenly across 500 companies.
- Switching to equal weight right after cap weight's best run, or the reverse.
- Comparing price returns with total returns.
- Forgetting equal weight's higher turnover and fees.
FAQ
What is the equal-weight S&P 500?
The same companies as the S&P 500, each set to about 0.2% at every quarterly rebalance.
Why has equal weight underperformed?
The largest companies, mostly technology, rose much faster than the typical member.
How much are the top 10 stocks in the S&P 500?
In SPY on November 9, 2026, the top 10 companies were 38.9% of the fund.
Has equal weight ever beaten cap weight?
Yes, including in 2022 and in parts of 2026.
Is equal weight riskier?
It holds more small and mid-sized companies and trades more, but it is less concentrated in a few names.
Which ETF tracks the equal-weight S&P 500?
RSP is the best-known fund tracking it; check fees before buying.
Sources
- State Street SPDR: SPY daily holdings (Nov 9, 2026)
- S&P Dow Jones Indices: S&P 500 Equal Weight Index
- Kiplinger: RSP vs SPY, why these S&P 500 ETFs have different returns
- FRED: Nasdaq-100 (NASDAQ100) and Dow Jones Industrial Average (DJIA)
Facts checked November 10, 2026. X posts are cited as evidence of the question, not of the answer.