By Ploutos:
With SPY recently surpassing the $100bn asset threshold, it is time to re-visit an over-looked counterpart to the capitalization weighted SPY: equal weighted RSP.
RSP consists of the same 500 stocks as the S&P 500 index, but instead of weighting the holdings by their market capitalization, it weights each holding equally. Instead of the S&P 500’s largest component, Exxon Mobil (XOM), contributing 3.50% (as of 1/20/2012) of the fund, and smallest component Titanium Metals (TIE) contributing 0.11% of the fund, each holding is weighted at 0.2%.
RSP, the Rydex S&P Equal Weight ETF, has been in existence since only April 30, 2003, ten years less than the first ETF, SPY. However, RSP’s benchmark, the S&P Equal Weighted Index, has been tracked by the CME since the end of 1989 giving us a longer horizon for comparability between the two funds. RSP has held up well against its cap-weighted big brother.