Equal-Weight Funds Offer a Broader Route Into the AI Trade
Zacks points to equal-weight S&P 500 and technology ETFs as ways to limit reliance on a handful of AI-linked mega-cap stocks.
Key takeaways
- Zacks highlighted equal-weight funds as a way to reduce reliance on mega-cap technology stocks while retaining AI exposure.
- At publication, the S&P 500 Equal Weight Index had 15.7% technology exposure, versus nearly 40% for the S&P 500.
- Zacks named RSP, EQL and EQWL as broad-market options, and RSPT, QQEW and QQQE as technology funds.
Zacks highlighted equal-weight ETFs as one way to maintain exposure to AI-related growth while reducing reliance on a small group of large technology stocks. The publisher’s analysis said rising concerns about valuations, spending and financing have made the AI trade riskier.
The article cited Bridgewater Associates founder Ray Dalio’s warning that the boom resembles a “classic bubble.” It also pointed to rising bond yields and the concentration of market gains in a handful of AI-related stocks as risks.
For broader exposure, Zacks discussed equal-weight S&P 500 funds. It reported that the S&P 500 Equal Weight Index allocated 15.7% to technology, compared with nearly 40% for the S&P 500.
The article said the equal-weight index had gained about 10% year to date and 11% over the past year, while the S&P 500 had risen around 14% and 16%, respectively. Zacks named Invesco S&P 500 Equal Weight ETF (RSP), ALPS Equal Sector Weight ETF (EQL) and Invesco S&P 100 Equal Weight ETF (EQWL) as examples.
For investors seeking fuller technology-sector exposure, Zacks listed RSPT, QQEW and QQQE. It noted that equal-weight technology funds may be more volatile than broader equal-weight strategies because of their heavier sector exposure.
This article was produced with the help of AI technology. Source: Yahoo Finance
