SP500 Market Cap x Equal Weight ETF: Vantagens, Desvantagens e Qual Estratégia rendeu MAIS?

And with the explosive rise in debt among technology companies in the United States, the top five have seen their debt double in the last 9 months. Yes, we are talking about Meta, Google, Amazon, Tesla, Nvidia, companies that are riding a very positive wave of artificial intelligence, yet leveraging themselves to build all the infrastructure. If you are skeptical regarding this investment versus what it will return as revenue, today's revenue dictates where the S&P 500 currently stands. We don't have a bubble; profits are rising, but so is leverage. And when the speed of leverage begins to rise faster than profit, investors become reticent. In today's video, I will show three ETFs for us to invest in, allocate, or at least study, if you are also skeptical regarding this dynamic between leverage rising much faster than profit in this post-August 2026. We are already in September. The disclaimer is on the screen. I am Bruno Mazone. Welcome here to Clube dos Dividendos and also to Clube do ETF. This video is going to both channels, folks, because I will talk about three specific ETFs, but since the topic is also macro, I think it makes sense for me to post it on Clube dos Dividendos. I extend an invitation to those who specifically like ETFs. This video will air over on Clube do ETF, which is a new channel I created. Well, I have collected three charts here, folks. I will use two of them here in English, as you can see, and I will use the last one in Portuguese, thanks to our honorable chattem. They help us translate these charts. Let's go. Hyperscaler is a term used to define technology companies in the United States. Why hyperscaler? Because they grow their profits insanely, year over year, even while being large. And recently, they have also started to significantly increase capex, their investment, their capital expenditure. This capex is basically directed toward artificial intelligence infrastructure. We are talking about data centers, we are talking about natural gas distribution, we are talking about companies that are indeed creating an ecosystem as optimized as possible to be able to maintain all their computing and ever-increasing processing, right? So, these investments are what are being...well, not today, but in 2025/2026, investors in general started to diversify their allocations a little bit, rather than just allocating in tech companies when it comes to equities, because they're seeing that high speed in leverage, in investments, in capital expenditure versus profits still rising significantly, with earnings per share hitting records. But the second derivative, which is the speed, that leverage is passing, right? And so, some projections are starting to be made. Projections, folks. First, we'll have the net profit in blue on this chart here, okay? Of these five biggest companies or the hyper scalers, sometimes it's a little more, sometimes a little less, guys, we'll include at least five to seven of them, right? It used to be called the Magnificent Seven and so on, right? You already know, it's the tech companies in the United States, okay? When we look at the profits of these companies in blue, my goodness, the thing just doesn't stop climbing, right? It doesn't stop climbing. And the 2026 projections, okay, they are being beaten. The 2027 projections are starting to show a slight dip in profit, but even so, right, if you look from 2022 onwards, when ChatGPT was launched, okay? The profits of this artificial intelligence ecosystem have taken off. Infrastructure like Nvidia, I don't even need to mention, okay? A mad rush there for their chips and their technology, okay? So I don't even need to say that in terms of profit, we are still seeing, okay? a very large increase. Unlike the dot-com bubble in the 2000s, these companies, predominantly the top five, the top ten , they are generating cash, they are performing, they are profitable; there are good arguments for paying a bit more for a valuation. However, folks, when it comes to speed, and now I want to show the net cash remaining at the end of the quarter and what is projected for the coming years. Free cash flow, okay? Free cash flow. This free cash flow in 2026, okay? In 2025, to tell the truth, right? It has already started to yield at a slower speed; investments in data centers, blah blah, everything was well-accepted there. From 2022 to 2024, starting in 2025, investors began to see that, look , profit is growing, wonderful, but the cash is already disappearing. And when we look at cash, assuming, in a, uh, at a time when the American Central Bank has real interest rates, right, the interest rates there are higher than they were 5 years ago, 10 years ago, we start to see some pressure on companies 'balance sheets, even if they are wonderful, okay? And then the speed in 2026, not so much in 2025, but certainly in 2026, the speed of the burn, let's call it cash burn, okay? or the capital expenditure of the investment made, okay? Generating then a projected cash flow for 2027 that is negative for the first time. And in 2026 we saw Google announce 10.2 billion in financing. So the Google follow-on recently was 10.2 billion, which a company that is making a ton of profit, I don't even need to say who Google is, suddenly, suddenly can no longer or intends not to use its cash, and starts now to issue debt to finance its projects. We are starting to collect charts that show projections and the last 12 months of free cash flow, precise here for 2026, and also for 2027. So, the 2026-2027 projection, we notice, folks, that these projections are starting to meet the reality of the last 12 months and the graph is downward. And the speed of the cash burn is not necessarily leverage yet, it's just cash that already exists . The speed of the cash burn is higher than profit growth. And this need for capital, folks, some are arguing that the American yield curve is widening not because of inflation in the United States, which is above target, yes, for over 40-something months now, but it's not galloping like it was in 2021. And even so, the curve there is similar to Brazil's, it just won't stop widening, right? Why does this curve here just not stop widening? Well, the American government is having to remunerate its creditors at 4.79 now, right? It was 73 , it updated here to 79%per year on 10- year bonds. Google, folks, pays maybe around 4.95%, since it is a private company when it issues debentures and recently did a follow-on stock issuance . Many pension funds, many large investors look at this return of 4.7, 4.9, 4.8, or even 5%per year for the next 10 years and are preferring to invest in Google's follow-on. "Oh, I'll go there and buy the shares that are being issued by Google." I think the return will be higher. So, the U.S. Treasury has started facing competition from the companies themselves, because they are starting out in 2026. Google's Alphabet, which controls Google, gave the starting signal: look, I will finance myself, but wait, I won't use my own cash; I'll finance myself through you. You have the appetite, you , the market, the market has shown it does, okay? A 10.2 billion dollar follow-on, guys, out of nowhere, that's no joke, alright? That's a lot of money . And there are even arguments that say the Treasury is suffering a little bit too. With this explosive rise in the last 9 months, debt doubling for these companies, they are starting to hover there, suddenly leveraged, something that wasn't common in recent years, or rather, perhaps in the last decade. This chart shows that in the last 9 months the leverage of the five big hyperscale companies has increased a lot, because I translated it here in our Gemini, the source is Bloomberg, okay? One of the options, you must be wondering, to escape a potential (I'm not saying crash, folks, but a flight of market flow) from the super-tech companies that are starting to have negative cash flow, to, perhaps, small caps that will benefit from this infrastructure being built, or maybe other large caps, but not necessarily tech large caps. Maybe we go to the healthcare sector, the insurance sector , financial, anyway. Maybe the market, and very likely the market will, folks, this is not a certainty, it's just my opinion, the market will diversify. In 2025, diversification was emerging markets, commodities, etc. This diversification tends to continue. We are seeing that there, sometimes there's a lack of flow, but it comes back. It's nice to have this diversification outside the United States and also in basic materials due to this AI infrastructure being invested in. Great. But I also think there will be diversification within the S&P 500, within the NASDAQ. So, what can we do to mitigate this leverage risk of the most famous companies? Well, one of the options, I think the most sensible option, perhaps without needing to find the needle in the haystack and just buying the whole haystack, okay? needle in the haystack and buying the whole haystack, is to start including in our portfolio, or at least studying and understanding the reason for switching from Market Cap ETFs to equal-weight ETFs. What is a market cap ETF in yellow here, everyone ? Basically, it's an ETF that invests in companies with the largest market capitalization, using the S&P 500, weighted by market cap—giving more weight to the company with the most influence in the S&P 500 today, down to the one with the least. I grabbed the top 20 here, but let's focus on the top 10 that I just underlined. Folks, today the top 10 portfolio of the S&P 500 is composed of Nvidia, Apple, Microsoft, and Amazon. The two Google stocks, in different classes, Broadcom, then we have Meta, Tesla, Berkshire, and that's it. These are the top 10. After that comes Micron Technology and Eli Lilly. See, these companies are the ones with the most weight in the S&P 500 because they are the companies that hold the largest market capitalization, okay? Number of shares times price, boom, the largest market cap is Nvidia today, neck and neck there with Apple. So, here is the top 10 portfolio. What I am going to discuss with you today as an alternative to mitigate risk without needing to diversify allocation outside the United States, okay? Are equal-weight ETFs. And here I present the first one, which I will spend a little more time on, and then I'll suggest two more in case you want to stay in the tech sector. Here I am talking about the RSP Invesco S&P 500 Equal Weight ETF. It costs 0.20%per year, the management fee is from Invesco, an ETF not that famous yet, but I believe it will become increasingly famous. And it is divided; the portfolio is composed of companies with the same weight. Of course, between one rebalancing or another, during the period until the next rebalancing, we will notice that one company rose more than the other, like for example now, Moderna is the company in the RSP today that has the most weight, it has 0.57%. The second is Veeva, the third is Zebra, the fourth is Charles River, the fifth is DoorDash . The sixth is PayPal, the seventh Global Payments. Salesforce, Expedia, Palo Alto, and so on. Guys, what I want to point out here to you is basic. The sector here will have all sectors diversified. You will have the 500 largest companies in the United States with equal weights, okay? So there won't be one that stands out. What is the highlight you give here for this ETF? It's during its rebalancing periods. Because quarterly rebalancing, for example, well, it's going to go three months there without rebalancing. Then a company that performed very well will have a higher weight, or a company that performed poorly will have a lower weight. But since the distribution of investments is done by weight and not by market cap, everyone starts from the zero line there. So you don't have large discrepancies and have even greater diversification than necessarily in the S&P 500 mothership, which ends up having market capitalization as the main factor for asset distribution, right? So I like this, folks, because you'll have companies that are leveraging themselves, you'll have famous companies, right? But you'll have at the same weight companies you don't even know; there are 500 companies, folks. So there's a lot here, okay? There's a lot. This is the first ETF. RSP, if we look at it, it was announced , its IPO was, folks, in '95, okay? The ETF is from '95, if memory serves, let me get exactly January '95. So, from January '95 to the present moment, September 2026, this ETF lost to the S& P 500, meaning it lost to the SPY, for example; here I put the S&P 500, I should have put the SPY, okay? Because the S&P 500 doesn't have an administration fee. This guy has 0.20. Ah, I said it here, I could have put SPY, it's a shame I didn't, but I'll still mark it for you. Look, the equal weight and not the market cap weight was worse than the market cap, okay? It was better than the TSM, Total Stock Market, which would be a VWRA, a VT, okay? So, uh, we have this ETF as good diversification and an interesting return, but from 1995 to 2026 it lost to the SPY, for example, it lost to the ETF that takes allocation, market cap, into account. Market Cap Weight. Cool. But I'm going to try to prove to you, using the ETF1 platform here, that when we analyze in time windows and who is going to invest in an ETF, an ETF as broad as this one, right, 500 companies , right, you are going to invest for the long term, most likely. I'm going to open the profitability and the same comparison using windows, 1-year windows, 3-year windows. I'll start with one-year windows where the SPY, or traditional S&P 500, 67%of the time— that's 246 one-year windows—performed better than the RSP, right? However, folks, what do we mean by one-year windows? We can jump from month to month, January to December, for every year from 1995 to 2026. These are one-year windows counted month by month ; wherever you place the cursor on the chart, it will show a return. You subtract 12 months from that return, and you'll get, for example, right now I'm in March 2021, RSP 71.5%return, TSM , total stock market 58. Let's see if I can zoom in for you, okay? Because then I can explain it better. It went to February, no problem. February 2021, RSP 32.6, TSM 32.1, which is the total stock market, VWRA or VT, S&P 500, SPY 31.3. Here the RSP won, but won in which window? February 2021, minus one year. February 2020. So, from February 2020, the pandemic, right? To here, February 2021, the post-pandemic recovery, the RSP had a slight advantage in February, okay? When we increase the window, looking at long-term investors and at this button I clicked saying RSP or equal weight, it is more diversified. You tend to rise less in bull markets, but you also tend to recover faster from crashes and perhaps even fall less, okay? In bear markets, mainly because the S&P 500 in recent years is very tech-heavy, technology, right? And well, gosh, technology is indeed a bit more volatile. If I open the window to 10 years, folks, then we have a little surprise here that might make you think twice. Why? The RSP starts beating the SPY or the S&P 500. In 10-year windows, from 1995 to now, 65%of the time the RSP beat the S&P 500. Relevant, right? Quite relevant. 65%is a good number. If you go to a 15-year window, 67%. 20- year windows, 71%. In conclusion, folks , this broader diversification due to equal weights for 500 companies, right? It ends up in drawdowns, in drops, in bear markets falling less and recovering higher. I think that's how I end this chat with you. You don't want to leave the United States, you want to stay in the S&P 500, but you're quite skeptical, and it makes sense to be skeptical, okay guys? Because looking back at the 2000s, we didn't know that the internet would benefit media, would benefit advertising, and would benefit search. Everyone in the 1990s imagined that Amazon would be the most benefited company, that e-commerce would be the most benefited, and the tech companies there, you know, fiber optics and websites and such, would be benefited in general. It wasn't an advertiser, a banner that was in a post, ah, it went to the internet and this guy built an empire called Google. It was one of the companies that benefited most from the internet. And it wasn't Google that invested in fiber optics, it was other companies that don't even exist anymore ; so much fiber optic was built that it didn't even need to be used. So, if you think the moment is similar, of course it's not fiber optics, but maybe it's data centers, maybe it's something I can't even explain to you, guys, I think that if you have a touch of humility in your allocation—I’ll use "humility," but that's not quite the right word, okay? I think it's more common sense than humility. Whoever holds the full market-cap S&P 500, man, it has yielded more in the long run than the RSP. I don't see why you would sell the SPY, for example, okay? I just consider that within the diversification everyone is talking about—because, oh, it's a bubble, it's not a bubble—I don't think it's a bubble, right? But anyway, "oh, it's a bubble, it's too concentrated," blah, blah, blah. A beautiful form of diversification; you don't even need to leave the index, just change the allocation methodology from market cap to equal weight. Maybe you want to acquire a percentage of equal weight in the S&P 500. This is the chart from 2020 onwards, but you can have the ETF —actually, I had already made notes here—you can have this ETF, okay? Ah, it has a very comprehensive history, an upward trend. So I don't even need to state the obvious to say how interesting it is. Right, everyone? Did you like the ETF? For those who allocate in Brazil, not abroad yet, okay? And are thinking of allocating to IVVB11, for example, but have an ETF portfolio. The partner for this video here is, well, a partner of the Dividend Club and of the ETF as well. Why? I'm talking about ETFs. With an ETF, everyone has certainty or more clarity on which asset they are investing in. Fixed income ETFs here, equity ETFs, especially in the B3 environment, if you want zero costs. Touro has eliminated all costs, okay? The only cost there is, including options brokerage, is zero. You'll only have a cost upon exercise, 0.5%. And you don't need to activate RLP to have your fees zeroed out, your brokerage zeroed out. If you open an account, send me an email, okay? clube.dividendosnoplural@gmail.com and I'll send you a complete technical analysis course focused on long-term investments, okay? Touro, a great partner of the club, link in the description and in the first pinned comment. And I'm heading to the final part of the video. If you've stayed until the end now, leave a comment for me. Folks, I'm now bringing something for those of you watching and saying: " Man, I don't want the S&P 500.""I want technology, period, but I want a tech stock that is equal-weighted." Bingo, you have the RSPT, you'll have this guy here, equal-weighted, in the S&P 500 technology sector. It is a beautiful ETF. Let me know in the comments if you want me to do a specific analysis of it , okay? Leave it in the comments. It has a correlation that I thought would be more negative with the EWZ. It's actually a correlation that's more positive than I imagined, okay? Compared to the EWZ, but it is indeed a good diversification against the BOVA11 here in Brazil, against Brazilian assets, because Brazilian assets are more value, you'll be investing more gently there with equal-weight, right? More in technology. I think this ETF is a good complement to a Brazil position. Just as if you want to go even more into technology, okay? And maybe even include some small caps, you come here, look, QQQE, which is the NASDAQ 100 equal-weighted. So you'll also have big companies here, pure technology, because NASDAQ is good technology, right? And you'll have the equal-weighted QQQE. So I finish with these suggestions, it's not a recommendation, folks. These are foreign ETFs. You have to have an account at a foreign brokerage, even though our partner in today's video is Touro, which for now is only the B3 world. I do find this allocation strategy very interesting. You don't need to change the index, change the strategy. And which weight might, at a given moment where euphoria is very high or the risk is increasing faster than the euphoria, or the profit, as we saw at the beginning of the video, debt versus EPS or year-over-year profit, well, why not be a little more grounded , a more old-school ETF, distributing by equal weights instead of by market cap? Right, everyone? So that's it, I hope you enjoyed it. Best regards.