IJR vs. RSP: What’s The Difference?

The iShares Core S&P Small-Cap ETF (IJR) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. IJR is a iShares Small Blend fund and RSP is a Invesco Large Blend fund. So, what’s the difference between IJR and RSP? And which fund is better?

The expense ratio of IJR is 0.14 percentage points lower than RSP’s (0.06% vs. 0.2%). IJR also has a higher exposure to the industrials sector and a higher standard deviation. Overall, IJR has provided higher returns than RSP over the past ten years.

In this article, we’ll compare IJR vs. RSP. We’ll look at fund composition and industry exposure, as well as at their portfolio growth and holdings. Moreover, I’ll also discuss IJR’s and RSP’s performance, annual returns, and risk metrics and examine how these affect their overall returns.

Summary

IJR RSP
Name iShares Core S&P Small-Cap ETF Invesco S&P 500 Equal Weight ETF
Category Small Blend Large Blend
Issuer iShares Invesco
AUM 68.64B 28.62B
Avg. Return 13.97% 13.79%
Div. Yield 0.96% 1.31%
Expense Ratio 0.06% 0.2%

The iShares Core S&P Small-Cap ETF (IJR) is a Small Blend fund that is issued by iShares. It currently has 68.64B total assets under management and has yielded an average annual return of 13.97% over the past 10 years. The fund has a dividend yield of 0.96% with an expense ratio of 0.06%.

The Invesco S&P 500 Equal Weight ETF (RSP) is a Large Blend fund that is issued by Invesco. It currently has 28.62B total assets under management and has yielded an average annual return of 13.79% over the past 10 years. The fund has a dividend yield of 1.31% with an expense ratio of 0.2%.

IJR’s dividend yield is 0.35% lower than that of RSP (0.96% vs. 1.31%). Also, IJR yielded on average 0.18% more per year over the past decade (13.97% vs. 13.79%). The expense ratio of IJR is 0.14 percentage points lower than RSP’s (0.06% vs. 0.2%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

IJR vs. RSP - Industry Exposure

IJR RSP
Technology 14.32% 14.73%
Industrials 17.31% 14.62%
Energy 4.0% 3.9%
Communication Services 2.59% 4.31%
Utilities 1.8% 5.58%
Healthcare 11.55% 13.69%
Consumer Defensive 4.01% 6.86%
Real Estate 9.55% 5.84%
Financial Services 15.91% 13.43%
Consumer Cyclical 13.61% 13.01%
Basic Materials 5.34% 4.04%

The iShares Core S&P Small-Cap ETF (IJR) has the most exposure to the Industrials sector at 17.31%. This is followed by Financial Services and Technology at 15.91% and 14.32% respectively. Communication Services (2.59%), Energy (4.0%), and Consumer Defensive (4.01%) only make up 10.60% of the fund’s total assets.

IJR’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Consumer Cyclical, and Technology stocks at 5.34%, 9.55%, 11.55%, 13.61%, and 14.32%.

The Invesco S&P 500 Equal Weight ETF (RSP) has the most exposure to the Technology sector at 14.73%. This is followed by Industrials and Healthcare at 14.62% and 13.69% respectively. Basic Materials (4.04%), Communication Services (4.31%), and Utilities (5.58%) only make up 13.93% of the fund’s total assets.

RSP’s mid-section with moderate exposure is comprised of Real Estate, Consumer Defensive, Consumer Cyclical, Financial Services, and Healthcare stocks at 5.84%, 6.86%, 13.01%, 13.43%, and 13.69%.

IJR is 2.69% more exposed to the Industrials sector than RSP (17.31% vs 14.62%). IJR’s exposure to Financial Services and Technology stocks is 2.48% higher and 0.41% lower respectively (15.91% vs. 13.43% and 14.32% vs. 14.73%). In total, Communication Services, Energy, and Consumer Defensive also make up 4.47% less of the fund’s holdings compared to RSP (10.60% vs. 15.07%).

Holdings

IJR - Holdings

IJR Holdings Weight
BlackRock Cash Funds Treasury SL Agency 1.08%
GameStop Corp Class A 0.86%
Omnicell Inc 0.61%
Stamps.com Inc 0.58%
Saia Inc 0.57%
Power Integrations Inc 0.57%
Exponent Inc 0.54%
NeoGenomics Inc 0.53%
Chart Industries Inc 0.53%
Macy’s Inc 0.51%

IJR’s Top Holdings are BlackRock Cash Funds Treasury SL Agency, GameStop Corp Class A, Omnicell Inc, Stamps.com Inc, and Saia Inc at 1.08%, 0.86%, 0.61%, 0.58%, and 0.57%.

Power Integrations Inc (0.57%), Exponent Inc (0.54%), and NeoGenomics Inc (0.53%) have a slightly smaller but still significant weight. Chart Industries Inc and Macy’s Inc are also represented in the IJR’s holdings at 0.53% and 0.51%.

RSP - Holdings

RSP Holdings Weight
Chipotle Mexican Grill Inc 0.27%
Nike Inc Class B 0.25%
MSCI Inc 0.25%
Monolithic Power Systems Inc 0.25%
Enphase Energy Inc 0.25%
Advanced Micro Devices Inc 0.25%
ResMed Inc 0.24%
PerkinElmer Inc 0.24%
IDEXX Laboratories Inc 0.24%
Danaher Corp 0.24%

RSP’s Top Holdings are Chipotle Mexican Grill Inc, Nike Inc Class B, MSCI Inc, Monolithic Power Systems Inc, and Enphase Energy Inc at 0.27%, 0.25%, 0.25%, 0.25%, and 0.25%.

Advanced Micro Devices Inc (0.25%), ResMed Inc (0.24%), and PerkinElmer Inc (0.24%) have a slightly smaller but still significant weight. IDEXX Laboratories Inc and Danaher Corp are also represented in the RSP’s holdings at 0.24% and 0.24%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

IJR RSP
Mean Return 1.21 1.19
R-squared 76.03 94.47
Std. Deviation 18.68 15.36
Alpha -3.7 -2.45
Beta 1.2 1.1
Sharpe Ratio 0.74 0.89
Treynor Ratio 10.77 12.12

The iShares Core S&P Small-Cap ETF (IJR) has a Alpha of -3.7 with a Beta of 1.2 and a Treynor Ratio of 10.77. Its Sharpe Ratio is 0.74 while IJR’s Standard Deviation is 18.68. Furthermore, the fund has a R-squared of 76.03 and a Mean Return of 1.21.

The Invesco S&P 500 Equal Weight ETF (RSP) has a Mean Return of 1.19 with a R-squared of 94.47 and a Sharpe Ratio of 0.89. Its Beta is 1.1 while RSP’s Treynor Ratio is 12.12. Furthermore, the fund has a Alpha of -2.45 and a Standard Deviation of 15.36.

IJR’s Mean Return is 0.02 points higher than that of RSP and its R-squared is 18.44 points lower. With a Standard Deviation of 18.68, IJR is slightly more volatile than RSP. The Alpha and Beta of IJR are 1.25 points lower and 0.10 points higher than RSP’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

IJR vs. RSP - Annual Returns

Year IJR RSP
2020 11.24% 12.75%
2019 22.79% 28.94%
2018 -8.43% -7.77%
2017 13.2% 18.52%
2016 26.49% 14.34%
2015 -2.0% -2.57%
2014 5.67% 14.02%
2013 41.36% 35.6%
2012 16.28% 17.04%
2011 0.9% -0.5%
2010 26.14% 21.3%

IJR had its best year in 2013 with an annual return of 41.36%. IJR’s worst year over the past decade yielded -8.43% and occurred in 2018. In most years the iShares Core S&P Small-Cap ETF provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 11.24%, 13.2%, and 16.28% respectively.

The year 2013 was the strongest year for RSP, returning 35.6% on an annual basis. The poorest year for RSP in the last ten years was 2018, with a yield of -7.77%. Most years the Invesco S&P 500 Equal Weight ETF has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 14.02%, 14.34%, and 17.04% respectively.

Portfolio Growth

IJR vs. RSP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IJR $10,000 $38,800 13.97%
RSP $10,000 $38,664 13.79%

A $10,000 investment in IJR would have resulted in a final balance of $38,800. This is a profit of $28,800 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.97%.

With a $10,000 investment in RSP, the end total would have been $38,664. This equates to a $28,664 profit over 11 years and a compound annual growth rate (CAGR) of 13.79%.

IJR’s CAGR is 0.18 percentage points higher than that of RSP and as a result, would have yielded $136 more on a $10,000 investment. Thus, IJR outperformed RSP by 0.18% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply