Equal-Weight S&P 500 Trails Market-Weighted Index by 6% in Six Months

The S&P 500’s equal-weight index lagged its market-cap-weighted counterpart by about 6% over six months, while the median constituent was about 15% below its 52-week high, exposing a sharp split between index leaders and the typical stock. A small group of large technology companies has supported the broader index while ordinary stocks remain under pressure. Rising Treasury yields, the dollar and oil prices have tightened U.S. financial conditions. The S&P 500’s equity risk premium has slipped below zero, leaving stocks less attractive on valuation relative to Treasury bonds. The two weighting approaches allocate influence differently. In the standard S&P 500, companies with larger market values carry more weight. The equal-weight version resets each constituent to a 0.2% target share at quarterly rebalancing, reducing the largest companies’ influence on its results.

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