Why the Invesco S&P 500 Equal Weight ETF (RSP) Might Be a Better Buy Than the Flagship Vanguard S&P 500 ETF (VOO) Right Now
The market is looking heavy, and it's weighted toward AI stocks.
Why the Invesco S&P 500 Equal Weight ETF (RSP) Might Be a Better Buy Than the Flagship Vanguard S&P 500 ETF (VOO) Right Now
Overview
The S&P 500 is often used interchangeably with "the market," but there are important differences investors should make sure they know about.
There are about 8,000 securities traded on U.S. markets, including exchange-trade funds (ETF), but the S&P 500 includes only 500 stocks. These are all U.S. companies that have a market cap of at least $22.7 billion in addition to other criteria.
Details
It's also a weighted index, which means that stocks are weighted by market cap. The larger a stock is, the more of it is represented in the index. So when the S&P 500 makes a move, it could be highly influenced by its largest components. Today, it's extremely tech-heavy.
Source
Originally published at www.fool.com.
