EUSA Is Beating SPY in 2026 While Retirees Rethink Mega-Cap Concentration

"iShares MSCI USA Equal Weighted ETF (NYSEARCA:EUSA) gives every stock in its universe roughly the same weight, regardless of market capitalization. Apple, Nvidia, and Microsoft each sit at around 0.18% of the portfolio, the same as a mid-size regional bank or an industrial manufacturer. The result is a fund where no single holding exceeds 0.25% of assets across 500-plus positions."

"The sector mix reflects this philosophy. Industrials lead at 16.3%, followed by Financials at 16.2% and Information Technology at 16.1%. Defensive sectors like Utilities and Consumer Staples each hold meaningful allocations, giving the fund a more balanced economic footprint than a cap-weighted index where tech dominates."

"Over the past year, EUSA returned 13.45% while SPY returned 20.8%, a gap driven largely by mega-cap tech leadership that equal weighting structurally avoids. The fund simply holds less of the names that dominated returns. The same story plays out over five years. EUSA's 45.23% cumulative return trails SPY's 72.08%."

Most broad market ETFs use market-cap weighting, concentrating portfolios heavily in mega-cap technology stocks. EUSA takes a different approach by assigning roughly equal weight to each stock regardless of size, capping individual positions at 0.25%. This creates a more balanced sector allocation with Industrials, Financials, and Technology each around 16%, compared to tech-dominated cap-weighted funds. The trade-off is performance: EUSA returned 13.45% over one year versus SPY's 20.8%, and 45.23% over five years versus SPY's 72.08%. Equal weighting sacrifices recent returns but reduces concentration risk for investors seeking genuine broad US economic exposure without betting heavily on dominant companies.

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