iShares MSCI USA Equal Weighted ETF

EUSA

Market cap $1.55B

Concentration risk has been persistent in the U.S. market in recent years. Narrow leadership in the hands of a few megacap, AI-linked stocks has pushed the S&P 500 into levels of concentration not seen in many years.

The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) has a concentration problem that keeps getting worse.

Most ETFs are now poorly balanced, skewed by a few tech stocks that performed exceedingly well. If these tech stocks fall dramatically as a group, it would result in exaggerated losses for ETFs that hold oversized positions.

Most broad market ETFs hand the biggest stocks the biggest votes. That means a standard S&P 500 fund today puts a disproportionate slice of your portfolio into a handful of mega-cap tech names, whether you want that concentration or not.

I am initiating iShares MSCI USA Equal Weighted ETF (EUSA) with a Hold, citing its uncommon equal-weighted approach and extremely low fee structure. EUSA offers lower Technology exposure and higher Industrials weighting versus the S&P 500, with a trailing PE of 24x and a P/B of 3.3x. Despite lagging RSP historically, EUSA's 2026 weighted return projection of 3.1% outpaces my S&P 500 estimate, benefiting from potential outperformance of smaller constituents.

A smart beta exchange traded fund, the iShares MSCI USA Equal Weighted ETF (EUSA) debuted on 05/05/2010, and offers broad exposure to the Style Box - All Cap Blend category of the market.

Launched on 05/05/2010, the iShares MSCI USA Equal Weighted ETF (EUSA) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Blend category of the market.

iShares MSCI USA Equal Weighted ETF is a passively managed vehicle tracking the MSCI USA Equal Weighted Index since September 2015. EUSA could be a solution to IVV's valuation and top-heaviness issues. And it does deliver here, with an about 11.45x lower weighted average market cap and a much lower P/E. However, surprising issues arise: EUSA has not only underperformed IVV since the index change in 2015 but also delivered higher volatility and deeper maximum drawdowns.

The iShares MSCI USA Equal Weighted ETF (EUSA) made its debut on 05/05/2010, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Blend category of the market.

The iShares MSCI USA Equal Weighted ETF (EUSA) made its debut on 05/05/2010, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Blend category of the market.