The Invesco S&P 500 Equal Weight ETF (RSP) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between RSP and DFAC? And which fund is better?
The expense ratio of RSP is 0.01 percentage points higher than DFAC’s (0.2% vs. 0.19%). RSP also has a lower exposure to the technology sector and a lower standard deviation. Overall, RSP has provided lower returns than DFAC over the past ten years.
In this article, we’ll compare RSP vs. DFAC. We’ll look at portfolio growth and risk metrics, as well as at their performance and fund composition. Moreover, I’ll also discuss RSP’s and DFAC’s holdings, annual returns, and industry exposure and examine how these affect their overall returns.
Summary
| RSP | DFAC | |
| Name | Invesco S&P 500 Equal Weight ETF | Dimensional U.S. Core Equity 2 ETF |
| Category | Large Blend | Large Blend |
| Issuer | Invesco | Dimensional Fund Advisors |
| AUM | 28.62B | 13.53B |
| Avg. Return | 13.79% | 13.93% |
| Div. Yield | 1.31% | 1.0% |
| Expense Ratio | 0.2% | 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%.
The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.
RSP’s dividend yield is 0.31% higher than that of DFAC (1.31% vs. 1.0%). Also, RSP yielded on average 0.14% less per year over the past decade (13.79% vs. 13.93%). The expense ratio of RSP is 0.01 percentage points higher than DFAC’s (0.2% vs. 0.19%).
Fund Composition
Industry Exposure
| RSP | DFAC | |
| Technology | 14.73% | 22.81% |
| Industrials | 14.62% | 14.13% |
| Energy | 3.9% | 2.67% |
| Communication Services | 4.31% | 7.63% |
| Utilities | 5.58% | 1.54% |
| Healthcare | 13.69% | 12.09% |
| Consumer Defensive | 6.86% | 5.94% |
| Real Estate | 5.84% | 0.37% |
| Financial Services | 13.43% | 16.17% |
| Consumer Cyclical | 13.01% | 13.09% |
| Basic Materials | 4.04% | 3.56% |
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 Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.
DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.
RSP is 8.08% less exposed to the Technology sector than DFAC (14.73% vs 22.81%). RSP’s exposure to Industrials and Healthcare stocks is 0.49% higher and 1.60% higher respectively (14.62% vs. 14.13% and 13.69% vs. 12.09%). In total, Basic Materials, Communication Services, and Utilities also make up 1.20% more of the fund’s holdings compared to DFAC (13.93% vs. 12.73%).
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%.
| DFAC Holdings | Weight |
| Apple Inc | 4.7% |
| Microsoft Corp | 3.81% |
| Amazon.com Inc | 2.39% |
| Johnson & Johnson | 1.05% |
| Facebook Inc Class A | 1.05% |
| JPMorgan Chase & Co | 1.0% |
| Alphabet Inc Class C | 0.85% |
| Alphabet Inc Class A | 0.84% |
| Berkshire Hathaway Inc Class B | 0.75% |
| Visa Inc Class A | 0.74% |
DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.
JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.
Risk Analysis
| RSP | DFAC | |
| Mean Return | 1.19 | 1.19 |
| R-squared | 94.47 | 95.1 |
| Std. Deviation | 15.36 | 15.55 |
| Alpha | -2.45 | -2.75 |
| Beta | 1.1 | 1.12 |
| Sharpe Ratio | 0.89 | 0.88 |
| Treynor Ratio | 12.12 | 11.85 |
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 Treynor Ratio is 12.12 while RSP’s Mean Return is 1.19. Furthermore, the fund has a Sharpe Ratio of 0.89 and a R-squared of 94.47.
The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Mean Return of 1.19 with a Alpha of -2.75 and a R-squared of 95.1. Its Standard Deviation is 15.55 while DFAC’s Sharpe Ratio is 0.88. Furthermore, the fund has a Beta of 1.12 and a Treynor Ratio of 11.85.
RSP’s Mean Return is 0.00 points lower than that of DFAC and its R-squared is 0.63 points lower. With a Standard Deviation of 15.36, RSP is slightly less volatile than DFAC. The Alpha and Beta of RSP are 0.30 points higher and 0.02 points lower than DFAC’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | DFAC |
| 2020 | 12.75% | 15.8% |
| 2019 | 28.94% | 29.54% |
| 2018 | -7.77% | -9.43% |
| 2017 | 18.52% | 18.82% |
| 2016 | 14.34% | 16.31% |
| 2015 | -2.57% | -2.53% |
| 2014 | 14.02% | 9.56% |
| 2013 | 35.6% | 37.55% |
| 2012 | 17.04% | 17.93% |
| 2011 | -0.5% | -1.96% |
| 2010 | 21.3% | 21.67% |
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 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| DFAC | $10,000 | $38,796 | 13.93% |
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 DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.
RSP’s CAGR is 0.14 percentage points lower than that of DFAC and as a result, would have yielded $132 less on a $10,000 investment. Thus, RSP performed worse than DFAC by 0.14% annually.
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