The Case for Equal Weight

Vinay Tolia |
Categories
Weekly Market Commentary

The market returns are widening — are your clients ready?

For the first time since 2018, all 11 S&P sectors are projected to post positive EPS growth (FactSet, Jan 2026). The earnings story is broadening — and so is the price action. Equal-weight S&P 500 (RSP) is outperforming cap-weight (SPY) by +3.6% YTD as of 3/20/2026.

After the dot-com bubble, equal-weight outperformed cap-weight for seven consecutive years (S&P Global). Today's concentration is nearly double that peak. For clients with index fund exposure, most are carrying a 33%+ position in just seven stocks — whether they chose to or not.

All 11 S&P sectors projected positive EPS growth in 2026 (first since 2018) and historical equal-weight vs cap-weight returns after concentration peaks — data as of 3/25/2026

Ways To Express This View

Growth: 2 YR / RSP / TBD participation / 15% buffer

Income: 2 YR / RSP / TBD coupon / 70% European barrier

*Indicative terms only. Final pricing subject to market conditions at time of trade.

This material is for informational purposes only and does not constitute a recommendation. Data sourced from public sources and has not been independently verified. Past performance is not indicative of future results. Structured notes involve risks including potential loss of principal.