The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and RSP is a Invesco Large Blend fund. So, what’s the difference between ITOT and RSP? And which fund is better?
The expense ratio of ITOT is 0.17 percentage points lower than RSP’s (0.03% vs. 0.2%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than RSP over the past ten years.
In this article, we’ll compare ITOT vs. RSP. We’ll look at risk metrics and performance, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss ITOT’s and RSP’s fund composition, holdings, and industry exposure and examine how these affect their overall returns.
Summary
| ITOT | RSP | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | Invesco S&P 500 Equal Weight ETF |
| Category | Large Blend | Large Blend |
| Issuer | iShares | Invesco |
| AUM | 41.97B | 28.62B |
| Avg. Return | 14.59% | 13.79% |
| Div. Yield | 1.2% | 1.31% |
| Expense Ratio | 0.03% | 0.2% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.
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%.
ITOT’s dividend yield is 0.11% lower than that of RSP (1.2% vs. 1.31%). Also, ITOT yielded on average 0.80% more per year over the past decade (14.59% vs. 13.79%). The expense ratio of ITOT is 0.17 percentage points lower than RSP’s (0.03% vs. 0.2%).
Fund Composition
Industry Exposure
| ITOT | RSP | |
| Technology | 24.49% | 14.73% |
| Industrials | 9.21% | 14.62% |
| Energy | 2.51% | 3.9% |
| Communication Services | 10.54% | 4.31% |
| Utilities | 2.35% | 5.58% |
| Healthcare | 13.59% | 13.69% |
| Consumer Defensive | 5.79% | 6.86% |
| Real Estate | 3.67% | 5.84% |
| Financial Services | 13.69% | 13.43% |
| Consumer Cyclical | 11.69% | 13.01% |
| Basic Materials | 2.47% | 4.04% |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.
ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.
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%.
ITOT is 9.76% more exposed to the Technology sector than RSP (24.49% vs 14.73%). ITOT’s exposure to Financial Services and Healthcare stocks is 0.26% higher and 0.10% lower respectively (13.69% vs. 13.43% and 13.59% vs. 13.69%). In total, Basic Materials, Energy, and Real Estate also make up 5.13% less of the fund’s holdings compared to RSP (8.65% vs. 13.78%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.
Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.
| 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%.
Risk Analysis
| ITOT | RSP | |
| Mean Return | 1.27 | 1.19 |
| R-squared | 99.4 | 94.47 |
| Std. Deviation | 14.02 | 15.36 |
| Alpha | -0.54 | -2.45 |
| Beta | 1.03 | 1.1 |
| Sharpe Ratio | 1.04 | 0.89 |
| Treynor Ratio | 14.13 | 12.12 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Standard Deviation of 14.02 with a Treynor Ratio of 14.13 and a Mean Return of 1.27. Its Sharpe Ratio is 1.04 while ITOT’s Beta is 1.03. Furthermore, the fund has a Alpha of -0.54 and a R-squared of 99.4.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Mean Return of 1.19 and a Beta of 1.1. Its R-squared is 94.47 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Alpha of -2.45 and a Treynor Ratio of 12.12.
ITOT’s Mean Return is 0.08 points higher than that of RSP and its R-squared is 4.93 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than RSP. The Alpha and Beta of ITOT are 1.91 points higher and 0.07 points lower than RSP’s Alpha and Beta.
Performance
Annual Returns
| Year | ITOT | RSP |
| 2020 | 20.75% | 12.75% |
| 2019 | 30.87% | 28.94% |
| 2018 | -5.27% | -7.77% |
| 2017 | 21.23% | 18.52% |
| 2016 | 12.59% | 14.34% |
| 2015 | 0.96% | -2.57% |
| 2014 | 13.01% | 14.02% |
| 2013 | 32.67% | 35.6% |
| 2012 | 15.98% | 17.04% |
| 2011 | 1.55% | -0.5% |
| 2010 | 16.15% | 21.3% |
ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| RSP | $10,000 | $38,664 | 13.79% |
A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.
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%.
ITOT’s CAGR is 0.80 percentage points higher than that of RSP and as a result, would have yielded $3,646 more on a $10,000 investment. Thus, ITOT outperformed RSP by 0.80% annually.
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