CNBC reports that for long-term investors, the standard advice on core holdings such as the S&P 500 still largely stands: avoid drastic moves and stick to a long-term plan. But the market’s gains over the past decade have been driven heavily by a small group of large technology companies, increasing concentration risk inside the index.
That is why many analysts urged investors to consider equal-weight S&P 500 funds, where each company carries the same weight. In 2026, however, that approach has not delivered as hoped. In August and September, the equal-weight version posted its longest losing streak since 2022, and in September the index fell by more than 4%.
The concern is not only weaker returns. According to a recent Goldman Sachs analysis, market breadth — the share of stocks contributing to the index’s gains — has dropped to its lowest level since the dotcom bubble. The Kobeissi Letter also found that, since the start of 2024, a basket of 42 AI stocks generated 67% of the S&P 500’s price return.
DataTrek Research said this week that the equal-weight S&P 500 has consistently lagged the market-cap-weighted version over any one-year holding period for almost four years. At the same time, that has left the standard S&P 500 “dramatically overweight” tech, in its words. Technology stocks now make up about 16% of the equal-weight S&P 500, versus nearly 40% in the standard index.
Todd Rosenbluth, head of research & editorial at TMX VettaFi, argues investors should not see this as a simple either-or decision. In his view, a more sensible approach is to combine market-cap-weighted ETFs with equal-weight options in a portfolio, rather than relying entirely on one strategy.
