This Is My No. 1 Recommended ETF to Buy in July
2026-07-23 16:25
•Stefon Walters •The Motley Fool
••••• ••• Axe Capital view
RSP: A Balanced Bet for Local Investors
An equal-weight S&P 500 ETF reduces tech concentration riskâworth watching from a SA perspective.
South African investors chasing global tech exposure often lean on the S&P 500 index, which has morphed into a concentration of a handful of mega-caps like Apple and Nvidia. These seven stocks now make up nearly a third of the index, skewing returns and inflating risk. The Invesco S&P 500 Equal Weight ETF (RSP) offers a neat solution: it spreads your bets evenly across sectors, bringing industrials, utilities and healthcare into play. This diversification is important, especially when rand volatility can amplify shocks from US tech giants. While local stocks like Naspers and Prosus naturally provide some global tech exposure, RSP can be a complementary way to manage concentration risk offshore. Be aware this may underperform if the concentrated megacaps keep soaring. Also, a stronger dollar versus the rand (USD/ZAR) can either dampen or magnify returns depending on timing. this is just my opinion and not financial advice
I would add RSP cautiously to a balanced portfolio to counter tech concentration risk, while monitoring rand moves closely. Avoid piling solely into traditional Nasdaq-heavy ETFs right now.
- RSP
- USD/ZAR
- Naspers
- Strong outperformance of mega-cap tech stocks
- Sharp rand weakening increasing forex volatility
6/10
The article recommends the Invesco S&P 500 Equal Weight ETF (RSP) as a complementary investment to balance the concentration risk in the traditional S&P 500 index. The S&P 500 has become heavily concentrated in mega-cap tech stocks, with the Magnificent Seven accounting for nearly 32% and the tech sector representing 38% of the index. RSP provides more diversified exposure across sectors like industrials, utilities, and healthcare, and has outperformed the S&P 500 year-to-date.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Stefon Walters
Categories: Technology, AI, Semiconductors, Healthcare, Equities
Tickers: RSP, NVDA, AAPL
Sentiment: Positive - Recommended as the top ETF to buy in July due to its balanced approach to S&P 500 exposure, outperformance year-to-date, and reduced tech concentration risk compared to traditional S&P 500 ETFs. Mentioned as one of two companies (with Apple) accounting for over 14% of the S&P 500, highlighting concentration risk rather than endorsing or criticizing the company itself.
Keywords: S&P 500, equal-weight ETF, tech concentration, diversification, sector allocation, mega-cap stocks
Insights:
- RSP: Positive: Recommended as the top ETF to buy in July due to its balanced approach to S&P 500 exposure, outperformance year-to-date, and reduced tech concentration risk compared to traditional S&P 500 ETFs.
- NVDA: Neutral: Mentioned as one of two companies (with Apple) accounting for over 14% of the S&P 500, highlighting concentration risk rather than endorsing or criticizing the company itself.
- AAPL: Neutral: Mentioned as one of two companies (with Nvidia) accounting for over 14% of the S&P 500, highlighting concentration risk rather than endorsing or criticizing the company itself.