Equal-weight ETFs gain as investors target AI bottlenecks

VettaFi research director Cinthia Murphy forecast the ETF market could set records in 2026 for flows, trading volume and new launches if the broader stock market rises more than 30% this year. She linked the projection to sustained market momentum and repeated buying of dips in leading stocks, which fuels trading and product development.

On strategy, Murphy pointed to a shift toward equal-weighted ETFs as forward earnings broaden beyond the largest tech leaders known as the Mag 7. She noted equal-weighted approaches typically trail when leadership is narrow, and that stronger earnings among the other 493 S&P 500 companies is creating room for equal-weight funds to perform better.

Murphy highlighted inflows into several equal-weight ETFs: the Invesco S&P 500 Equal Weight ETF (RSP) added about $12.46 billion year to date in 2026; the Invesco QQQ Equal Weight ETF (QEW), launched in March, gathered roughly $8.83 million since its debut; and the Alps Equal Sector Weight ETF (EQL) recorded about $116.18 million in inflows this year.

She identified bottlenecks in the AI supply chain as a thematic driver. The Roundhill Memory ETF (DRAM) reached about $26.9 billion in assets after demand tied to a memory-component shortage. Murphy named photonics, which moves data via light rather than copper, as a likely next constraint and investment focus. “I think the next coming up is photonics,” she said.

The Aura AI Photonics ETF (PHOX), intended to track a VettaFi AI Photonics Index, is expected to launch soon to provide exposure to companies involved in optical data transmission and related technologies. VettaFi is the index provider for EQL and PHOX and receives licensing fees; EQL and PHOX are not issued, sponsored or sold by VettaFi, and the firm has no obligations related to their issuance, marketing or trading.

Observers have linked recent flows to a mix of demand for broader participation through equal-weight strategies and targeted thematic bets on AI supply-chain niches that may affect growth or pricing for select suppliers.