RSP vs. ACWI: What’s The Difference?

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.

Summary

RSP ACWI
Name Invesco S&P 500 Equal Weight ETF iShares MSCI ACWI ETF
Category Large Blend N/A
Issuer Invesco iShares
AUM 28.62B 16.85B
Avg. Return 13.79% 10.21%
Div. Yield 1.31% 1.39%
Expense Ratio 0.2% 0.32%

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%).

Fund Composition

Industry Exposure

RSP vs. ACWI - Industry Exposure

RSP ACWI
Technology 14.73% 20.41%
Industrials 14.62% 9.65%
Energy 3.9% 3.48%
Communication Services 4.31% 9.87%
Utilities 5.58% 2.61%
Healthcare 13.69% 11.74%
Consumer Defensive 6.86% 7.15%
Real Estate 5.84% 2.75%
Financial Services 13.43% 15.58%
Consumer Cyclical 13.01% 12.01%
Basic Materials 4.04% 4.73%

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%).

Holdings

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%.

ACWI - Holdings

ACWI Holdings Weight
Apple Inc 3.44%
Microsoft Corp 2.91%
Amazon.com Inc 2.21%
Facebook Inc A 1.25%
Alphabet Inc Class C 1.12%
Alphabet Inc A 1.09%
Taiwan Semiconductor Manufacturing Co Ltd 0.79%
Tesla Inc 0.78%
NVIDIA Corp 0.74%
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%.

Risk Analysis

RSP ACWI
Mean Return 1.19 0.89
R-squared 94.47 99.96
Std. Deviation 15.36 14.05
Alpha -2.45 0.15
Beta 1.1 1
Sharpe Ratio 0.89 0.71
Treynor Ratio 12.12 9.45

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.

Performance

Annual Returns

RSP vs. ACWI - Annual Returns

Year RSP ACWI
2020 12.75% 16.38%
2019 28.94% 26.7%
2018 -7.77% -9.15%
2017 18.52% 24.35%
2016 14.34% 8.22%
2015 -2.57% -2.39%
2014 14.02% 4.64%
2013 35.6% 22.91%
2012 17.04% 15.99%
2011 -0.5% -7.6%
2010 21.3% 12.31%

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.

Portfolio Growth

RSP vs. ACWI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $38,664 13.79%
ACWI $10,000 $27,241 10.21%

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.


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