Consistently beating the S&P 500 index is a difficult feat for most portfolio managers. But over the past decade, one simple strategy has managed to do just that.
The Guggenheim S&P 500 Equal Weight ETF (RSP) has outperformed the traditional market-cap-weighted S&P 500 over the past ten years.
RSP delivered a 10.36% average annual total return against the S&P 500’s 7.71% average annual total return (through April 22, 2013).
RSP is linked to the S&P 500 Equal Weight Index (EWI) and each stock within the fund is assigned a portfolio weighting of 0.20%. That means even the S&P 500’s tiniest stock, Advanced Micro Devices (AMD), receives the same amount of exposure as its largest (Exxon Mobil) even though AMD is 197 times smaller by market size.