Equal-Weight S&P 500 Trails Standard Index Again in 2026

Investors who put the same amount of money into every company in the S&P 500 have fallen behind the standard market-weight index again in 2026, according to CNBC. The standard index gives bigger companies a bigger share, while the equal-weight version treats all companies alike.

September was the hardest month for the equal-weight index. It fell more than 4% that month, which was its longest multi-week losing streak since 2022.

A large part of the gap comes from technology stocks. Tech makes up about 16% of the equal-weight S&P 500, compared with nearly 40% in the standard index. A basket of 42 AI stocks generated 67% of the S&P 500's price return since the start of 2024, according to The Kobeissi Letter.

Other research points to the same pattern. Market breadth, which measures how many stocks are rising, has fallen to its lowest level since the dotcom bubble, according to a Goldman Sachs analysis. DataTrek Research said the equal-weight index has lagged the market-cap-weighted index over any one-year holding period for almost four years.

History shows the gap has changed over time. DataTrek found that the equal-weight S&P 500 beat the market-cap index by 3.2 points on average in 2004 to 2014. Since 2015, it has trailed by 2.8 points on average.

There were some signs of movement at the end of the period. Equal-weight defensive sectors, such as consumer staples, rose nearly 5% in the week of the report, their biggest surge since February.

Some experts have offered ideas for investors. Todd Rosenbluth of TMX VettaFi recommends combining cap-weighted and equal-weight exchange-traded funds (ETFs, investment funds that trade like stocks) within a portfolio. Todd Sohn of Baird Strategas recommends high-quality, short-duration investment grade fixed income, which means bonds from financially strong borrowers that mature in a shorter time.

Todd Sohn also noted that Nvidia is larger than the entire consumer discretionary sector of the S&P 500.