RSP: Why I Am Upgrading This Large-Cap ETF
Summarize this article with:
The Intelligent ETF Investor115 FollowersFollow5ShareSavePlay(16min)CommentsSummaryI am upgrading Invesco S&P 500 Equal Weight ETF (RSP) to Buy, favoring its diversified sector exposure over SPY and VOO.RSP’s equal-weight methodology reduces concentration risk, offering higher exposure to Industrials, Financials, and other underweighted S&P 500 sectors.RSP trades at a lower P/E (16.7x) and price/book (3.1x) than SPY, enhancing its appeal amid sector rotation and smaller-cap outperformance trends.While my scenarios suggest modest probability-weighted returns, RSP should outperform in bearish or neutral markets and offers a prudent alternative to cap-weighted ETFs. Epiximages/iStock via Getty Images One of my concerns with stocks after a three-year run fueled by the performance of the Magnificent 7 or the Elite 8 was the high concentration of the S&P 500 in just a few stocks. AtThis article was written byThe Intelligent ETF Investor115 FollowersFollowAlan Brochstein, CFA has been contributing articles to Seeking Alpha since 2007. He has worked on the sell-side and the buy-side in fixed-income and on the buy-side in equities. Alan got his start as a financial professional in the securities industry in 1986 after earning a B.A. in Economics and in Mathematical Methods in the Social Sciences from Northwestern University. He was managing investments in institutional environments until he founded AB Analytical Services in 2007 to provide independent consulting to registered investment advisors. He also prepared management reviews for Management CV, a firm focused on evaluating the skill and quality of management teams at publicly-traded companies.Alan was one of the first investment professionals to focus exclusively on the cannabis industry when he started to doing so in 2014. In 2013, he launched 420 Investor, a subscription service forced on cannabis stocks that he now runs on the Seeking Alpha platform, and he is also the managing partner of New Cannabis Ventures, a leading provider of relevant financial information in the cannabis industry since 2015. Alan has been a big fan of ETFs for decades, liking both how they enable individual investors to manage diversified investment portfolios at a reasonable cost and investment managers to help their clients have passively managed portfolios among their holdings. He has been writing about ETFs extensively at Seeking Alpha since 2025, aiming to help readers better understand the ETF universe, which has gotten quite large Alan is trying to help investors understand what they own or what they could own and to also help them become aware of the risks of their ETFs relative to other ETFs.He maintains a 79-ETF Focus List that is broad, including both very large and popular ETFs as well as many that are not as widely followed but that stand out in his view. He has also created a model portfolio as of year-end 2025.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. I include RSP in my ETF model portfolioSeeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.