The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and ACWI is a iShares N/A fund. So, what’s the difference between RSP and ACWI? And which fund is better?
The expense ratio of RSP is 0.12 percentage points lower than ACWI’s (0.2% vs. 0.32%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided higher returns than ACWI over the past ten years.
In this article, we’ll compare RSP vs. ACWI. We’ll look at annual returns and performance, as well as at their fund composition and holdings. Moreover, I’ll also discuss RSP’s and ACWI’s industry exposure, portfolio growth, and risk metrics and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||iShares MSCI ACWI ETF|
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%.
The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.
RSP’s dividend yield is 0.08% lower than that of ACWI (1.31% vs. 1.39%). Also, RSP yielded on average 3.57% more per year over the past decade (13.79% vs. 10.21%). The expense ratio of RSP is 0.12 percentage points lower than ACWI’s (0.2% vs. 0.32%).
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%.
The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.
ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.
RSP is 5.68% less exposed to the Technology sector than ACWI (14.73% vs 20.41%). RSP’s exposure to Industrials and Healthcare stocks is 4.97% higher and 1.95% higher respectively (14.62% vs. 9.65% and 13.69% vs. 11.74%). In total, Basic Materials, Communication Services, and Utilities also make up 3.28% less of the fund’s holdings compared to ACWI (13.93% vs. 17.21%).
|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%.
|Facebook Inc A||1.25%|
|Alphabet Inc Class C||1.12%|
|Alphabet Inc A||1.09%|
|Taiwan Semiconductor Manufacturing Co Ltd||0.79%|
|JPMorgan Chase & Co||0.71%|
ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.
Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Treynor Ratio of 12.12 with a Beta of 1.1 and a R-squared of 94.47. Its Mean Return is 1.19 while RSP’s Standard Deviation is 15.36. Furthermore, the fund has a Alpha of -2.45 and a Sharpe Ratio of 0.89.
The iShares MSCI ACWI ETF (ACWI) has a Beta of 1 with a R-squared of 99.96 and a Standard Deviation of 14.05. Its Treynor Ratio is 9.45 while ACWI’s Mean Return is 0.89. Furthermore, the fund has a Alpha of 0.15 and a Sharpe Ratio of 0.71.
RSP’s Mean Return is 0.30 points higher than that of ACWI and its R-squared is 5.49 points lower. With a Standard Deviation of 15.36, RSP is slightly more volatile than ACWI. The Alpha and Beta of RSP are 2.60 points lower and 0.10 points higher than ACWI’s Alpha and Beta.
RSP had its best year in 2013 with an annual return of 35.6%. RSP’s worst year over the past decade yielded -7.77% and occurred in 2018. In most years the Invesco S&P 500 Equal Weight ETF provided moderate returns such as in 2014, 2016, and 2012 where annual returns amounted to 14.02%, 14.34%, and 17.04% respectively.
The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in RSP would have resulted in a final balance of $38,664. This is a profit of $28,664 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.
RSP’s CAGR is 3.57 percentage points higher than that of ACWI and as a result, would have yielded $11,423 more on a $10,000 investment. Thus, RSP outperformed ACWI by 3.57% 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.