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.
|Name||iShares Russell 1000 ETF||Invesco S&P 500 Equal Weight ETF|
|Category||Large Blend||Large Blend|
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%).
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).
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%).
|Facebook Inc Class A||2.03%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.82%|
|Berkshire Hathaway Inc Class B||1.24%|
|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%.
|Chipotle Mexican Grill Inc||0.27%|
|Nike Inc Class B||0.25%|
|Monolithic Power Systems Inc||0.25%|
|Enphase Energy Inc||0.25%|
|Advanced Micro Devices Inc||0.25%|
|IDEXX Laboratories Inc||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).
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.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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.
|Fund||Initial Balance||Final Balance||CAGR|
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.
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)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) 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!
3) 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!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.