The iShares Russell 1000 Growth ETF (IWF) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. IWF is a iShares Large Growth fund and RSP is a Invesco Large Blend fund. So, what’s the difference between IWF and RSP? And which fund is better?
The expense ratio of IWF is 0.01 percentage points lower than RSP’s (0.19% vs. 0.2%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than RSP over the past ten years.
In this article, we’ll compare IWF vs. RSP. We’ll look at performance and fund composition, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss IWF’s and RSP’s risk metrics, annual returns, and industry exposure and examine how these affect their overall returns.
|Name||iShares Russell 1000 Growth ETF||Invesco S&P 500 Equal Weight ETF|
|Category||Large Growth||Large Blend|
The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% 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%.
IWF’s dividend yield is 0.79% lower than that of RSP (0.52% vs. 1.31%). Also, IWF yielded on average 3.94% more per year over the past decade (17.72% vs. 13.79%). The expense ratio of IWF is 0.01 percentage points lower than RSP’s (0.19% vs. 0.2%).
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The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.
IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.
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%.
IWF is 24.56% more exposed to the Technology sector than RSP (39.29% vs 14.73%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 4.61% higher and 8.51% higher respectively (17.62% vs. 13.01% and 12.82% vs. 4.31%). In total, Energy, Basic Materials, and Real Estate also make up 10.64% less of the fund’s holdings compared to RSP (3.14% vs. 13.78%).
|Facebook Inc Class A||3.91%|
|Alphabet Inc Class A||3.2%|
|Alphabet Inc Class C||3.03%|
|Visa Inc Class A||1.91%|
|The Home Depot Inc||1.62%|
IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.
Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.
|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%.
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The iShares Russell 1000 Growth ETF (IWF) has a Sharpe Ratio of 1.19 with a Standard Deviation of 14.42 and a R-squared of 92.93. Its Alpha is 2.16 while IWF’s Treynor Ratio is 17.1. Furthermore, the fund has a Mean Return of 1.48 and a Beta of 1.03.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Treynor Ratio of 12.12 with a Beta of 1.1 and a Standard Deviation of 15.36. Its Alpha is -2.45 while RSP’s Mean Return is 1.19. Furthermore, the fund has a R-squared of 94.47 and a Sharpe Ratio of 0.89.
IWF’s Mean Return is 0.29 points higher than that of RSP and its R-squared is 1.54 points lower. With a Standard Deviation of 14.42, IWF is slightly less volatile than RSP. The Alpha and Beta of IWF are 4.61 points higher and 0.07 points lower than RSP’s Alpha and Beta.
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IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% 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 IWF would have resulted in a final balance of $55,920. This is a profit of $45,920 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.72%.
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%.
IWF’s CAGR is 3.94 percentage points higher than that of RSP and as a result, would have yielded $17,256 more on a $10,000 investment. Thus, IWF outperformed RSP by 3.94% annually.
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