The equal-weight S&P 500 underperformed the market-cap weighted index in 2026, with September being the most brutal month, falling more than 4% and capping its longest multi-week losing streak since 2022. Market breadth has dropped to its lowest level since the dotcom bubble, while a basket of 42 AI stocks generated 67% of the S&P 500’s price return since the start of 2024. Experts now recommend combining cap-weighted ETFs with equal-weight options, or adding mid-cap funds and real assets to diversify technology concentration risk. The equal-weight index has consistently lagged the market-cap weighted version over any given 1-year holding period for almost four years, the longest rough stretch since at least 2004.
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