The iShares Russell 1000 Value ETF (IWD) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and RSP is a Invesco Large Blend fund. So, what’s the difference between IWD and RSP? And which fund is better?
The expense ratio of IWD is 0.01 percentage points lower than RSP’s (0.19% vs. 0.2%). IWD also has a higher exposure to the financial services sector and a lower standard deviation. Overall, IWD has provided lower returns than RSP over the past ten years.
In this article, we’ll compare IWD vs. RSP. We’ll look at portfolio growth and annual returns, as well as at their holdings and performance. Moreover, I’ll also discuss IWD’s and RSP’s risk metrics, industry exposure, and fund composition and examine how these affect their overall returns.
Summary
| IWD | RSP | |
| Name | iShares Russell 1000 Value ETF | Invesco S&P 500 Equal Weight ETF |
| Category | Large Value | Large Blend |
| Issuer | iShares | Invesco |
| AUM | 54.1B | 28.62B |
| Avg. Return | 11.40% | 13.79% |
| Div. Yield | 1.57% | 1.31% |
| Expense Ratio | 0.19% | 0.2% |
The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.
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%.
IWD’s dividend yield is 0.26% higher than that of RSP (1.57% vs. 1.31%). Also, IWD yielded on average 2.39% less per year over the past decade (11.40% vs. 13.79%). The expense ratio of IWD is 0.01 percentage points lower than RSP’s (0.19% vs. 0.2%).
Fund Composition
Industry Exposure
| IWD | RSP | |
| Technology | 10.28% | 14.73% |
| Industrials | 11.77% | 14.62% |
| Energy | 4.76% | 3.9% |
| Communication Services | 8.67% | 4.31% |
| Utilities | 4.88% | 5.58% |
| Healthcare | 17.78% | 13.69% |
| Consumer Defensive | 7.76% | 6.86% |
| Real Estate | 4.94% | 5.84% |
| Financial Services | 20.43% | 13.43% |
| Consumer Cyclical | 5.62% | 13.01% |
| Basic Materials | 3.1% | 4.04% |
The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.
IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.
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%.
IWD is 7.00% more exposed to the Financial Services sector than RSP (20.43% vs 13.43%). IWD’s exposure to Healthcare and Industrials stocks is 4.09% higher and 2.85% lower respectively (17.78% vs. 13.69% and 11.77% vs. 14.62%). In total, Energy, Utilities, and Real Estate also make up 0.74% less of the fund’s holdings compared to RSP (14.58% vs. 15.32%).
Holdings
| IWD Holdings | Weight |
| Berkshire Hathaway Inc Class B | 2.58% |
| JPMorgan Chase & Co | 2.25% |
| Johnson & Johnson | 2.24% |
| UnitedHealth Group Inc | 1.78% |
| Procter & Gamble Co | 1.71% |
| The Walt Disney Co | 1.5% |
| Bank of America Corp | 1.43% |
| Comcast Corp Class A | 1.33% |
| Exxon Mobil Corp | 1.2% |
| Pfizer Inc | 1.18% |
IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.
The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.
| 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
| IWD | RSP | |
| Mean Return | 1.03 | 1.19 |
| R-squared | 92.38 | 94.47 |
| Std. Deviation | 14.35 | 15.36 |
| Alpha | -3.23 | -2.45 |
| Beta | 1.02 | 1.1 |
| Sharpe Ratio | 0.81 | 0.89 |
| Treynor Ratio | 11.06 | 12.12 |
The iShares Russell 1000 Value ETF (IWD) has a Alpha of -3.23 with a Sharpe Ratio of 0.81 and a Standard Deviation of 14.35. Its Beta is 1.02 while IWD’s Treynor Ratio is 11.06. Furthermore, the fund has a Mean Return of 1.03 and a R-squared of 92.38.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Beta of 1.1 with a Alpha of -2.45 and a Standard Deviation of 15.36. Its R-squared is 94.47 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Treynor Ratio of 12.12 and a Mean Return of 1.19.
IWD’s Mean Return is 0.16 points lower than that of RSP and its R-squared is 2.09 points lower. With a Standard Deviation of 14.35, IWD is slightly less volatile than RSP. The Alpha and Beta of IWD are 0.78 points lower and 0.08 points lower than RSP’s Alpha and Beta.
Performance
Annual Returns
| Year | IWD | RSP |
| 2020 | 2.67% | 12.75% |
| 2019 | 26.34% | 28.94% |
| 2018 | -8.4% | -7.77% |
| 2017 | 13.47% | 18.52% |
| 2016 | 17.09% | 14.34% |
| 2015 | -3.95% | -2.57% |
| 2014 | 13.21% | 14.02% |
| 2013 | 32.18% | 35.6% |
| 2012 | 17.28% | 17.04% |
| 2011 | 0.21% | -0.5% |
| 2010 | 15.3% | 21.3% |
IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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 |
| IWD | $10,000 | $30,746 | 11.40% |
| RSP | $10,000 | $38,664 | 13.79% |
A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.
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%.
IWD’s CAGR is 2.39 percentage points lower than that of RSP and as a result, would have yielded $7,918 less on a $10,000 investment. Thus, IWD performed worse than RSP by 2.39% annually.
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