Competition is nothing new in the exchange-traded funds (ETFs) industry, and one of the most fertile territories for competition is fees. Fee cuts are the norm in the ETF business, and in a sign of the intensifying competitive landscape when it comes to attracting assets, some unique ETFs could start unveiling lower fees. Proving that fee cuts are not exclusively the territory of the largest issuers or cap-weighted funds, Guggenheim said Thursday it is reducing the annual fee on the Guggenheim S&P 500 Equal Weight ETF (RSP). RSP is one of the godfathers of the equal-weight ETF movement, a forerunner to the smart beta phenomenon.

In a move that puts its annual fee well below the average for U.S. large-cap smart beta strategies, RSP's new annual fee is now 0.2%, a 50% reduction from the previous level. RSP's new expense ratio is the equivalent of $20 per year on a $10,000 investment. "This significant fee reduction is designed to benefit existing shareholders and acknowledge the increasing use of RSP by institutional and individual investors as a core equity holding," said Douglas Mangini, Guggenheim senior managing director and head of intermediary distribution, in a statement. (See also: A Venerable Equal-Weight ETF.)

Some equal-weight ETFs, including RSP, have long histories of outperforming their cap-weighted equivalents. That outperformance, critics assert, is often attributable to the equal-weight ETFs featuring more exposure to smaller stocks. Indeed, RSP does not shy away from its de-emphasis of large-cap stocks. "The equal-weight approach was implemented to eliminate the large-cap bias of traditional capitalization-weighted index products," said Guggenheim. "The resulting reduction in concentration risk, combined with a quarterly rebalance‚Äč, has helped RSP consistently outperform the S&P 500 on a rolling monthly basis since the fund's 2003 inception."

It is impossible to argue with RSP's results. On a rolling monthly basis over the past five years, RSP has outperformed the cap-weighted S&P 500 84% of the time. Over the past decade, that number jumps to 100% of the time, according to issuer data. (See also: Get Diversification the Easy Way With ETFs.)

By equally weighting its holdings, RSP's sector profile differs from that of the traditional S&P 500. Whereas technology, healthcare and financial services are the three largest sector weights in the standard S&P 500, RSP's three largest sector allocations are consumer discretionary, industrials and financials. RSP is underweight technology stocks by almost 1,000 basis points relative to the cap-weighted S&P 500. With almost $13.5 billion in assets under management, RSP is one of the largest equal-weight ETFs. (See also: S&P 500 ETFs: Equal Weight vs. Market Weight.)