Equal Weight ETFs


This is one of a series of articles discussing smart beta ETFs. Other smart beta articles you can read:


Introduction To Equal Weight ETFs

An equal weight ETF is merely an ETF that follows an index that doesn't weight the stocks it is holding by market capitalization, but instead gives an equal weight to every stock. It seems like a subtle difference, but the effects can be profound. An equal weight index causes the largest companies to be under-weighted compared to the market, and the smallest companies to be over-weighted compared to the market. This tilt towards smaller companies can be important, as factor research almost always concludes that smaller companies outperform large companies over the long-term.

An equal weight index often also causes a value tilt, because a traditional market capitalization weighted index is required to continue to buy the most highly priced (valued) stocks. By visiting the ETF's website, you can usually find information on the ETF's holding, such as the average price to book value, or average market capitalization. By comparing this information to information obtained from SPY's website (or the appropriate benchmark), you can usually determine if there is in fact a value tilt.

There are a large number of equal weight ETPs, as shown in this table:

CategoryCount
Alternatives 3
Asset Allocation1
Commodities2
Global Equity37
Special Security Types5
US Equity128
US Fixed Income 3
Total179

Equal weight ETFs were some of the first "smart-beta" ETFs, as shown by this table:

Year of InceptionCount
20001
20034
20053
200626
20072
20082
20106
20119
20127
20137
201414
201522
201611
201720
201818
201923
20204
Total179

Note that there were actually even more ETFs launched then this table shows, as we are only displaying the launch dates of ETFs still active in our database. There were more ETFs that were launched during these years that have since been closed down by their sponsor.

More and more ETFs are being launched that combine equal weight investing with other investment factors:

Number of Factors UsedCount
093
144
218
311
411
52
Total179

Here are the equal weight ETFs that only use equal weighting as a strategy (i.e. they are not multi-factor ETFs):

SymbolDescriptionInception DateCategoryActions
XNTKSPDR NYSE Technology ETF09/25/2000US Equity Analyze
RSPInvesco S&P 500 Equal Weight ETF04/24/2003US Equity Analyze
KBESPDR S&P Bank ETF11/08/2005US EquityAnalyze
KCESPDR S&P Capital Markets ETF11/08/2005US Equity Analyze
KIESPDR S&P Insurance ETF 11/08/2005US Equity Analyze
XBISPDR S&P Biotech ETF01/31/2006US EquityAnalyze
XHBSPDR S&P Homebuilders ETF01/31/2006US EquityAnalyze
XSDSPDR S&P Semiconductor ETF01/31/2006US EquityAnalyze
QQEWFirst Trust NASDAQ-100 Equal Weighted Index Fund ETF04/19/2006US Equity Analyze
QTECFirst Trust NASDAQ-100-Technology Sector ETF04/19/2006US Equity Analyze
FBTFirst Trust NYSE Arca Biotechnology ETF06/19/2006US EquityAnalyze
KRESPDR S&P Regional Banking ETF06/19/2006US EquityAnalyze
XESSPDR S&P Oil & Gas Equipment & Services ETF06/19/2006US Equity Analyze
XMESPDR S&P Metals and Mining ETF06/19/2006US Equity Analyze
XOPS&P Oil and Gas Exploration ETF06/19/2006US Equity Analyze
XPHSPDR S&P Pharmaceuticals ETF06/19/2006US Equity Analyze
XRTSPDR S&P Retail ETF06/19/2006US EquityAnalyze
PZDInvesco Cleantech Portfolio ETF10/24/2006Global Equity Analyze
RCDInvesco S&P 500 Equal Weight Consumer Discretionary ETF11/01/2006US Equity Analyze
RGIInvesco S&P 500 Equal Weight Industrials ETF11/01/2006US EquityAnalyze
RHSInvesco S&P 500 Equal Weight Consumer Staples ETF11/01/2006US EquityAnalyze
RTMInvesco S&P 500 Equal Weight Materials ETF11/01/2006US Equity Analyze
RYEInvesco S&P 500 Equal Weight Energy ETF11/01/2006US Equity Analyze
RYFInvesco S&P 500 Equal Weight Financials ETF11/01/2006US Equity Analyze
RYHInvesco S&P 500 Equal Weight Health Care ETF11/01/2006US Equity Analyze
RYTInvesco S&P 500 Equal Weight Technology ETF11/01/2006US Equity Analyze
RYUInvesco S&P 500 Equal Weight Utilities ETF11/01/2006US Equity Analyze
EQWLInvesco Russell Top 200 Equal Weight Portfolio ETF12/01/2006US Equity Analyze
QQXTNASDAQ 100 Ex-Technology ETF02/08/2007US Equity Analyze
PLWInvesco 1-30 Treasury Ladder Portfolio ETF10/11/2007US Fixed Income Analyze
GCCGreenHaven Continuous Commodity Index Fund ETF01/24/2008CommoditiesAnalyze
EUSAiShares MSCI USA Equal Weighted ETF05/05/2010US Equity Analyze
MLPGETRACS Alerian Natural Gas MLP ETN07/13/2010Special Security TypesAnalyze
RETLDirexion Retail Sector (3x) ETF07/14/2010US EquityAnalyze
USCIUnited States Commodity Index ETF08/10/2010CommoditiesAnalyze
EWMCInvesco S&P MidCap 400 Equal Weight ETF12/03/2010US EquityAnalyze
EWSCInvesco S&P SmallCap 600 Equal Weight ETF12/03/2010US EquityAnalyze
XHESPDR S&P Healthcare Equipment ETF01/26/2011US Equity Analyze
XTLSPDR S&P Telecom ETF01/26/2011US Equity Analyze
XTNSPDR S&P Transportation ETF01/26/2011US Equity Analyze
XARSPDR S&P Aerospace & Defense ETF09/28/2011US Equity Analyze
XHSSPDR S&P Health Care Services ETF09/28/2011US Equity Analyze
XSWSPDR S&P Software & Services ETF09/28/2011US EquityAnalyze
NFTYFirst Trust India NIFTY 50 Equal Weight ETF02/14/2012Global EquityAnalyze
QQQEDirexion NASDAQ-100 Equal Weighted Index Shares ETF03/21/2012US Equity Analyze
BBCBioShares Biotechnology Clinical Trials ETF12/16/2014US EquityAnalyze
BBPBioShares Biotechnology Products ETF12/16/2014US Equity Analyze
EQALInvesco Russell 1000 Equal Weight ETF12/22/2014US Equity Analyze
XTiShares Exponential Technologies ETF03/19/2015Global Equity Analyze
DRIPDirexion Daily S&P Oil & Gas Exploration & Production Bear 3X ETF05/28/2015US Equity Analyze
GUSHDirexion Daily S&P Oil & Gas Exploration & Production Bull 3X ETF05/28/2015US Equity Analyze
LABDDirexion Daily S&P Biotech Bear 3X ETF05/28/2015US EquityAnalyze
LABUDirexion Daily S&P Biotech Bull 3X ETF05/28/2015US EquityAnalyze
EWREInvesco S&P 500 Equal Weight Real Estate ETF08/13/2015US EquityAnalyze
DPSTDirexion Daily Regional Banks Bull 3x Shares ETF08/19/2015US EquityAnalyze
CNCRLoncar Cancer Immunotherapy ETF10/13/2015US EquityAnalyze
XITKSPDR FactSet Innovative Technology ETF01/13/2016US EquityAnalyze
EPRFS&P High Quality Preferred ETF05/23/2016Special Security TypesAnalyze
XWEBSPDR S&P Internet ETF06/27/2016US EquityAnalyze
IBDInspire Corporate Bond Impact ETF07/10/2017US Fixed Income Analyze
EDOWFirst Trust Dow 30 Equal Weight ETF08/08/2017US Equity Analyze
MAGAPoint Bridge GOP Stock Tracker ETF09/06/2017US EquityAnalyze
GSEWGoldman Sachs Equal Weight U.S. Large Cap Equity ETF09/12/2017US Equity Analyze
BUYUSCF SummerHaven SHPEI Index ETF11/15/2017US EquityAnalyze
EMTYProShares Decline of the Retail Store ETF11/16/2017US EquityAnalyze
DTECALPS Disruptive Technologies ETF12/29/2017Global EquityAnalyze
FNGDBMO REX MicroSectors FANG+ Index 3X Inverse Leveraged ETN01/24/2018Global Equity Analyze
FNGUBMO REX MicroSectors FANG+ Index 3X Leveraged ETN01/24/2018Global Equity Analyze
VETSPacer Military Times Best Employers ETF04/10/2018US EquityAnalyze
IRBOiShares Robotics and Artificial Intelligence ETF06/26/2018Global EquityAnalyze
FNGOMicroSectors FANG+ Index 2X Leveraged ETN08/01/2018Global Equity Analyze
FNGZMicroSectors FANG+ Index -2X Leveraged ETN08/01/2018Global Equity Analyze
GNAFMicroSectors FANG+ Index -1X Inverse ETN08/01/2018Global Equity Analyze
QTUMDefiance Quantum ETF09/04/2018US Equity Analyze
EWCOInvesco S&P 500 Equal Weight Communication Services ETF11/07/2018US EquityAnalyze
EWJEiShares MSCI Japan Equal Weighted ETF03/07/2019Global Equity Analyze
BNKDMicroSectors U.S. Big Banks Index -3X Inverse Leveraged ETN04/03/2019US EquityAnalyze
BNKOMicroSectors U.S. Big Banks Index 2X Leveraged ETN04/03/2019US EquityAnalyze
BNKUMicroSectors U.S. Big Banks Index 3X Leveraged ETN04/03/2019US EquityAnalyze
BNKZMicroSectors U.S. Big Banks Index -2X Inverse Leveraged ETN04/03/2019US EquityAnalyze
KNABMicroSectors U.S. Big Banks Index Inverse ETN04/03/2019US EquityAnalyze
NRGDMicroSectors U.S. Big Oil Index -3X Inverse Leveraged ETN04/10/2019US Equity Analyze
NRGOMicroSectors U.S. Big Oil Index 2X Leveraged ETN04/10/2019US Equity Analyze
NRGUMicroSectors U.S. Big Oil Index 3X Leveraged ETN04/10/2019US Equity Analyze
NRGZMicroSectors U.S. Big Oil Index -2X Inverse Leveraged ETN04/10/2019US Equity Analyze
YGRNMicroSectors U.S. Big Oil Index Inverse ETN04/10/2019US Equity Analyze
PLATWisdomTree Modern Tech Platforms ETF05/22/2019Global Equity Analyze
NERDRoundhill BITKRAFT Esports & Digital Entertainment ETF06/04/2019Global Equity Analyze
CNRGSPDR S&P Kensho Clean Power ETF06/25/2019Global Equity Analyze
WCLDWisdomTree Cloud Computing ETF09/06/2019US EquityAnalyze
TMDVProShares Russell US Dividend Growers ETF11/27/2019US EquityAnalyze
SPQQSiren Large Cap Blend Index ETF07/01/2020US Equity Analyze
CCONDirexion Connected Consumer ETF08/25/2020US EquityAnalyze

Do equal weight ETFs outperform?

RSP, which equal weights the S&P 500, started in 2003 and has a clear track record of outperforming the S&P 500:



The track record for other equal weighted ETFs is not so amazing. For example, QQEW equal weights the Nasdaq 100:


EQWS equal weights the Russell 2000:


The fact that equal weighting the S&P 500 has worked, but equal weighting the Russell 2000 has not, is probably a sign that RSP's outpeformance compared to SPY has been due to its tilt toward smaller companies. The Russell 2000 already consists of small cap stocks, so tilting it even further towards smaller companies presumably doesn't have much of an effect.

Because of its proven track record, any investor willing to include smart beta ETFs in their long-term portfolio should probably include RSP in it.

One thing of note. If you look again at a price chart showing the ratio of RSP to SPY, you can see that RSP performed worse than SPY during the last market crash, although it quickly recovered. It is not clear why that happened.



All data is a live query from our database. The wording was last updated: 10/30/2018.

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