RSP vs. ARKK: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the ARK Innovation ETF (ARKK) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and ARKK is a ARK ETF Trust Mid-Cap Growth fund. So, what’s the difference between RSP and ARKK? And which fund is better?

The expense ratio of RSP is 0.55 percentage points lower than ARKK’s (0.2% vs. 0.75%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than ARKK over the past ten years.

In this article, we’ll compare RSP vs. ARKK. We’ll look at annual returns and holdings, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss RSP’s and ARKK’s risk metrics, industry exposure, and performance and examine how these affect their overall returns.

Summary

RSP ARKK
Name Invesco S&P 500 Equal Weight ETF ARK Innovation ETF
Category Large Blend Mid-Cap Growth
Issuer Invesco ARK ETF Trust
AUM 28.62B 25.52B
Avg. Return 13.79% 55.45%
Div. Yield 1.31% 0.0%
Expense Ratio 0.2% 0.75%

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 ARK Innovation ETF (ARKK) is a Mid-Cap Growth fund that is issued by ARK ETF Trust. It currently has 25.52B total assets under management and has yielded an average annual return of 55.45% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.75%.

RSP’s dividend yield is 1.31% higher than that of ARKK (1.31% vs. 0.0%). Also, RSP yielded on average 41.66% less per year over the past decade (13.79% vs. 55.45%). The expense ratio of RSP is 0.55 percentage points lower than ARKK’s (0.2% vs. 0.75%).

Fund Composition

Industry Exposure

RSP vs. ARKK - Industry Exposure

RSP ARKK
Technology 14.73% 30.5%
Industrials 14.62% 2.11%
Energy 3.9% 0.0%
Communication Services 4.31% 25.01%
Utilities 5.58% 0.0%
Healthcare 13.69% 29.47%
Consumer Defensive 6.86% 0.93%
Real Estate 5.84% 0.51%
Financial Services 13.43% 0.04%
Consumer Cyclical 13.01% 11.42%
Basic Materials 4.04% 0.0%

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 ARK Innovation ETF (ARKK) has the most exposure to the Technology sector at 30.5%. This is followed by Healthcare and Communication Services at 29.47% and 25.01% respectively. Utilities (0.0%), Energy (0.0%), and Financial Services (0.04%) only make up 0.04% of the fund’s total assets.

ARKK’s mid-section with moderate exposure is comprised of Real Estate, Consumer Defensive, Industrials, Consumer Cyclical, and Communication Services stocks at 0.51%, 0.93%, 2.11%, 11.42%, and 25.01%.

RSP is 15.77% less exposed to the Technology sector than ARKK (14.73% vs 30.5%). RSP’s exposure to Industrials and Healthcare stocks is 12.51% higher and 15.78% lower respectively (14.62% vs. 2.11% and 13.69% vs. 29.47%). In total, Basic Materials, Communication Services, and Utilities also make up 11.08% less of the fund’s holdings compared to ARKK (13.93% vs. 25.01%).

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%.

ARKK - Holdings

ARKK Holdings Weight
Tesla Inc 9.56%
Roku Inc Class A 6.48%
Teladoc Health Inc 5.76%
Square Inc A 4.37%
Zoom Video Communications Inc 4.36%
Shopify Inc A 4.27%
Spotify Technology SA 3.68%
Twilio Inc A 3.66%
Coinbase Global Inc Ordinary Shares – Class A 3.65%
Unity Software Inc Ordinary Shares 3.41%

ARKK’s Top Holdings are Tesla Inc, Roku Inc Class A, Teladoc Health Inc, Square Inc A, and Zoom Video Communications Inc at 9.56%, 6.48%, 5.76%, 4.37%, and 4.36%.

Shopify Inc A (4.27%), Spotify Technology SA (3.68%), and Twilio Inc A (3.66%) have a slightly smaller but still significant weight. Coinbase Global Inc Ordinary Shares – Class A and Unity Software Inc Ordinary Shares are also represented in the ARKK’s holdings at 3.65% and 3.41%.

Risk Analysis

RSP ARKK
Mean Return 1.19 0
R-squared 94.47 0
Std. Deviation 15.36 0
Alpha -2.45 0
Beta 1.1 0
Sharpe Ratio 0.89 0
Treynor Ratio 12.12 0

The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Treynor Ratio of 12.12 and a Alpha of -2.45. Its Sharpe Ratio is 0.89 while RSP’s Mean Return is 1.19. Furthermore, the fund has a Beta of 1.1 and a R-squared of 94.47.

The ARK Innovation ETF (ARKK) has a Alpha of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Sharpe Ratio is 0 while ARKK’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a R-squared of 0.

RSP’s Mean Return is 1.19 points higher than that of ARKK and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than ARKK. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than ARKK’s Alpha and Beta.

Performance

Annual Returns

RSP vs. ARKK - Annual Returns

Year RSP ARKK
2020 12.75% 152.52%
2019 28.94% 35.73%
2018 -7.77% 3.58%
2017 18.52% 87.38%
2016 14.34% -1.96%
2015 -2.57% 3.76%
2014 14.02% 0.0%
2013 35.6% 0.0%
2012 17.04% 0.0%
2011 -0.5% 0.0%
2010 21.3% 0.0%

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 2020 was the strongest year for ARKK, returning 152.52% on an annual basis. The poorest year for ARKK in the last ten years was 2016, with a yield of -1.96%. Most years the ARK Innovation ETF has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 3.58% respectively.

Portfolio Growth

RSP vs. ARKK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $18,170 13.79%
ARKK $10,000 $65,218 55.45%

A $10,000 investment in RSP would have resulted in a final balance of $18,170. This is a profit of $8,170 over 5 years and amounts to a compound annual growth rate (CAGR) of 13.79%.

With a $10,000 investment in ARKK, the end total would have been $65,218. This equates to a $55,218 profit over 5 years and a compound annual growth rate (CAGR) of 55.45%.

RSP’s CAGR is 41.66 percentage points lower than that of ARKK and as a result, would have yielded $47,048 less on a $10,000 investment. Thus, RSP performed worse than ARKK by 41.66% annually.


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