Large, narrow growth themes have repeatedly driven index concentration, leaving many non‑theme sectors relatively underowned. When those narrow themes subsequently deflate, historical episodes show that damage can be heavily skewed toward the crowded cohort rather than the entire equity market.
During the dot‑com bust, internet and mobile names bore the brunt of the drawdown while many traditional sectors such as staples, utilities, energy and some industrials proved more resilient. Equal‑weighted representations of the S&P 500 (SPX), and value‑tilted baskets, effectively captured this relative strength because they reduced dependence on the most expensive growth leaders.
Invesco S&P 500 (SPX) Equal Weight ETF (RSP) and Invesco S&P 500 Pure Value ETF (RPV) embody this construction, structurally tilting away from mega‑cap growth and toward financials, energy, materials, industrials and defensives. Sector funds such as Energy Select Sector SPDR Fund (XLE) and Utilities Select Sector SPDR Fund (XLU) sit squarely in the non‑theme camp that historically benefited from capital rotating out of speculative technology.
Across past unwinds of concentrated growth regimes, these types of exposures have not only outperformed cap‑weighted benchmarks such as the S&P 500 (SPX) but, in some windows, generated flat or positive returns while headline indices fell sharply. That pattern has been most evident when the shock was primarily an equity valuation reset in a narrow theme, rather than a broad credit or macro crisis that impaired cash flows across sectors simultaneously.