IWB vs. RSP: What’s The Difference?

The iShares Russell 1000 ETF (IWB) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. IWB is a iShares Large Blend fund and RSP is a Invesco Large Blend fund. So, what’s the difference between IWB and RSP? And which fund is better?

The expense ratio of IWB is 0.05 percentage points lower than RSP’s (0.15% vs. 0.2%). IWB also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWB has provided higher returns than RSP over the past ten years.

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

Summary

IWB RSP
Name iShares Russell 1000 ETF Invesco S&P 500 Equal Weight ETF
Category Large Blend Large Blend
Issuer iShares Invesco
AUM 30.54B 28.62B
Avg. Return 14.64% 13.79%
Div. Yield 1.14% 1.31%
Expense Ratio 0.15% 0.2%

The iShares Russell 1000 ETF (IWB) is a Large Blend fund that is issued by iShares. It currently has 30.54B total assets under management and has yielded an average annual return of 14.64% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.15%.

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%.

IWB’s dividend yield is 0.17% lower than that of RSP (1.14% vs. 1.31%). Also, IWB yielded on average 0.85% more per year over the past decade (14.64% vs. 13.79%). The expense ratio of IWB is 0.05 percentage points lower than RSP’s (0.15% vs. 0.2%).

Fund Composition

Industry Exposure

IWB vs. RSP - Industry Exposure

IWB RSP
Technology 25.33% 14.73%
Industrials 8.88% 14.62%
Energy 2.44% 3.9%
Communication Services 10.83% 4.31%
Utilities 2.36% 5.58%
Healthcare 13.35% 13.69%
Consumer Defensive 5.97% 6.86%
Real Estate 3.34% 5.84%
Financial Services 13.64% 13.43%
Consumer Cyclical 11.85% 13.01%
Basic Materials 2.02% 4.04%

The iShares Russell 1000 ETF (IWB) has the most exposure to the Technology sector at 25.33%. This is followed by Financial Services and Healthcare at 13.64% and 13.35% respectively. Utilities (2.36%), Energy (2.44%), and Real Estate (3.34%) only make up 8.14% of the fund’s total assets.

IWB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.97%, 8.88%, 10.83%, 11.85%, and 13.35%.

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%.

IWB is 10.60% more exposed to the Technology sector than RSP (25.33% vs 14.73%). IWB’s exposure to Financial Services and Healthcare stocks is 0.21% higher and 0.34% lower respectively (13.64% vs. 13.43% and 13.35% vs. 13.69%). In total, Utilities, Energy, and Real Estate also make up 7.18% less of the fund’s holdings compared to RSP (8.14% vs. 15.32%).

Holdings

IWB - Holdings

IWB Holdings Weight
Apple Inc 5.45%
Microsoft Corp 5.11%
Amazon.com Inc 3.43%
Facebook Inc Class A 2.03%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.82%
Tesla Inc 1.27%
Berkshire Hathaway Inc Class B 1.24%
NVIDIA Corp 1.11%
JPMorgan Chase & Co 1.09%

IWB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.45%, 5.11%, 3.43%, 2.03%, and 1.93%.

Alphabet Inc Class C (1.82%), Tesla Inc (1.27%), and Berkshire Hathaway Inc Class B (1.24%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IWB’s holdings at 1.11% and 1.09%.

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%.

Risk Analysis

IWB RSP
Mean Return 1.27 1.19
R-squared 99.73 94.47
Std. Deviation 13.87 15.36
Alpha -0.38 -2.45
Beta 1.02 1.1
Sharpe Ratio 1.05 0.89
Treynor Ratio 14.31 12.12

The iShares Russell 1000 ETF (IWB) has a R-squared of 99.73 with a Sharpe Ratio of 1.05 and a Treynor Ratio of 14.31. Its Alpha is -0.38 while IWB’s Beta is 1.02. Furthermore, the fund has a Standard Deviation of 13.87 and a Mean Return of 1.27.

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

IWB’s Mean Return is 0.08 points higher than that of RSP and its R-squared is 5.26 points higher. With a Standard Deviation of 13.87, IWB is slightly less volatile than RSP. The Alpha and Beta of IWB are 2.07 points higher and 0.08 points lower than RSP’s Alpha and Beta.

Performance

Annual Returns

IWB vs. RSP - Annual Returns

Year IWB RSP
2020 20.8% 12.75%
2019 31.26% 28.94%
2018 -4.91% -7.77%
2017 21.53% 18.52%
2016 11.91% 14.34%
2015 0.82% -2.57%
2014 13.08% 14.02%
2013 32.93% 35.6%
2012 16.27% 17.04%
2011 1.36% -0.5%
2010 15.94% 21.3%

IWB had its best year in 2013 with an annual return of 32.93%. IWB’s worst year over the past decade yielded -4.91% and occurred in 2018. In most years the iShares Russell 1000 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.08%, 15.94%, and 16.27% 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

IWB vs. RSP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWB $10,000 $42,462 14.64%
RSP $10,000 $38,664 13.79%

A $10,000 investment in IWB would have resulted in a final balance of $42,462. This is a profit of $32,462 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.64%.

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%.

IWB’s CAGR is 0.85 percentage points higher than that of RSP and as a result, would have yielded $3,798 more on a $10,000 investment. Thus, IWB outperformed RSP by 0.85% annually.


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