The Vanguard S&P 500 ETF Is Unstoppable, but This 1 Investment Could Be Safer Right Now

The Vanguard S&P 500 ETF Is Unstoppable, but This 1 Investment Could Be Safer Right Now David Dierking, The Motley Fool Mon, July 13, 2026 at 7:50 PM GMT+2 3 min read VOO ^GSPC NVDA AAPL MSFT Investing in the S&P 500  has been one of the simplest strategies to produce the best returns over the past decade. And it requires no stock picking. By simply investing in the largest U.

S. stocks, investors have captured a roughly 15% average annual return over the past decade. But that performance comes with an asterisk.

Over the past 10 years, the S&P 500 index has grown progressively more concentrated and riskier. As it stands currently, roughly 40% of the Vanguard S&P 500 ETF (NYSEMKT: VOO) is invested in tech stocks. Nearly 40% of index assets are also committed to just the top 10 holdings, including Nvidia , Apple , and Microsoft .

Missed Nvidia in 2009? This Rare Signal Is Flashing Again.  In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.

 For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia.   Continue » That's as high a concentration in this supposedly diversified index as we've ever seen. Translation: Investors are highly exposed to a sudden or deep correction in tech stocks.

That's not to say investors shouldn't continue to use the S&P 500 as the core of their portfolios -- just that they may want to approach it in a different way. Image source: Getty Images. Why equal-weighting the S&P 500 is better than market cap-weighting By choosing an equal-weight exchange-traded fund (ETF), such as the Invesco S&P 500 Equal Weight ETF (NYSEMKT: RSP), you maintain your U.

S. large-cap equity exposure, but you gain a more diversified investment. The top sectors for this fund are industrials (17%), tech (15%), financials (15%), healthcare (12%), and consumer discretionary (9%).

The remaining six S&P 500 sectors all have allocations of 4% to 7%. It's an outstanding mix of growth, defensive, and cyclical exposures with no obvious gaps. The other big advantage of the Invesco S&P 500 Equal Weight ETF is risk reduction.

The sector mix helps to mitigate idiosyncratic risk, but share price volatility is also meaningfully lower. In a market where share prices have risen for three-and-a-half years with minimal disruptions, and a handful of megacap tech names have been driving it, that kind of volatility reduction can help protect principal. That could come in very helpful in this bifurcated economy.

On one hand, S&P 500 earnings growth is strong and should be supportive of higher stocks. On the other hand, inflation is above 4%, consumer sentiment is near record lows, and geopolitical risks are elevated. There's clearly a world where stock prices could decline if any one of these factors escalates.

Story Continues The Invesco S&P 500 Equal Weight ETF allows you to maintain your U. S. equity exposure while tilting it in a slightly more conservative and diversified direction.

That could be useful in a lot of tech-heavy portfolios today. Should you buy stock in Invesco S&P 500 Equal Weight ETF right now? Before you buy stock in Invesco S&P 500 Equal Weight ETF, consider this: The Motley Fool  Stock Advisor  analyst team just identified what they believe are the  10 best stocks  for investors to buy now… and Invesco S&P 500 Equal Weight ETF wasn't one of them.

 The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when  Netflix  made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,  you'd have $395,679 !

* Or when  Nvidia  made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,  you'd have $1,294,805 ! * That performance is why people listen.

With a track record of  beating the S&P 500 by 4x ,  Stock Advisor  offers a distinct advantage. Don't miss the latest top 10 list, available with  Stock Advisor , and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 13, 2026.

David Dierking has positions in Apple. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy .