The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares Core Dividend Growth ETF (DGRO) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and DGRO is a iShares Large Value fund. So, what’s the difference between RSP and DGRO? And which fund is better?
The expense ratio of RSP is 0.12 percentage points higher than DGRO’s (0.2% vs. 0.08%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided higher returns than DGRO over the past ten years.
In this article, we’ll compare RSP vs. DGRO. We’ll look at portfolio growth and annual returns, as well as at their industry exposure and performance. Moreover, I’ll also discuss RSP’s and DGRO’s risk metrics, holdings, and fund composition and examine how these affect their overall returns.
Summary
| RSP | DGRO | |
| Name | Invesco S&P 500 Equal Weight ETF | iShares Core Dividend Growth ETF |
| Category | Large Blend | Large Value |
| Issuer | Invesco | iShares |
| AUM | 28.62B | 20B |
| Avg. Return | 13.79% | 12.46% |
| Div. Yield | 1.31% | 2.04% |
| Expense Ratio | 0.2% | 0.08% |
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 Core Dividend Growth ETF (DGRO) is a Large Value fund that is issued by iShares. It currently has 20B total assets under management and has yielded an average annual return of 12.46% over the past 10 years. The fund has a dividend yield of 2.04% with an expense ratio of 0.08%.
RSP’s dividend yield is 0.73% lower than that of DGRO (1.31% vs. 2.04%). Also, RSP yielded on average 1.33% more per year over the past decade (13.79% vs. 12.46%). The expense ratio of RSP is 0.12 percentage points higher than DGRO’s (0.2% vs. 0.08%).
Fund Composition
Industry Exposure
| RSP | DGRO | |
| Technology | 14.73% | 18.98% |
| Industrials | 14.62% | 12.52% |
| Energy | 3.9% | 0.11% |
| Communication Services | 4.31% | 4.53% |
| Utilities | 5.58% | 7.34% |
| Healthcare | 13.69% | 17.55% |
| Consumer Defensive | 6.86% | 10.24% |
| Real Estate | 5.84% | 0.0% |
| Financial Services | 13.43% | 18.47% |
| Consumer Cyclical | 13.01% | 7.42% |
| Basic Materials | 4.04% | 2.83% |
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 Core Dividend Growth ETF (DGRO) has the most exposure to the Technology sector at 18.98%. This is followed by Financial Services and Healthcare at 18.47% and 17.55% respectively. Energy (0.11%), Basic Materials (2.83%), and Communication Services (4.53%) only make up 7.47% of the fund’s total assets.
DGRO’s mid-section with moderate exposure is comprised of Utilities, Consumer Cyclical, Consumer Defensive, Industrials, and Healthcare stocks at 7.34%, 7.42%, 10.24%, 12.52%, and 17.55%.
RSP is 4.25% less exposed to the Technology sector than DGRO (14.73% vs 18.98%). RSP’s exposure to Industrials and Healthcare stocks is 2.10% higher and 3.86% lower respectively (14.62% vs. 12.52% and 13.69% vs. 17.55%). In total, Basic Materials, Communication Services, and Utilities also make up 0.77% less of the fund’s holdings compared to DGRO (13.93% vs. 14.70%).
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%.
| DGRO Holdings | Weight |
| Microsoft Corp | 3.29% |
| Apple Inc | 3.26% |
| Pfizer Inc | 2.89% |
| Johnson & Johnson | 2.87% |
| Procter & Gamble Co | 2.79% |
| Verizon Communications Inc | 2.68% |
| JPMorgan Chase & Co | 2.57% |
| The Home Depot Inc | 2.35% |
| Merck & Co Inc | 2.11% |
| Cisco Systems Inc | 1.98% |
DGRO’s Top Holdings are Microsoft Corp, Apple Inc, Pfizer Inc, Johnson & Johnson, and Procter & Gamble Co at 3.29%, 3.26%, 2.89%, 2.87%, and 2.79%.
Verizon Communications Inc (2.68%), JPMorgan Chase & Co (2.57%), and The Home Depot Inc (2.35%) have a slightly smaller but still significant weight. Merck & Co Inc and Cisco Systems Inc are also represented in the DGRO’s holdings at 2.11% and 1.98%.
Risk Analysis
| RSP | DGRO | |
| 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 Mean Return of 1.19 with a Beta of 1.1 and a Alpha of -2.45. Its Treynor Ratio is 12.12 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Standard Deviation of 15.36 and a R-squared of 94.47.
The iShares Core Dividend Growth ETF (DGRO) has a R-squared of 0 with a Treynor Ratio of 0 and a Beta of 0. Its Alpha is 0 while DGRO’s Standard Deviation is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Mean Return of 0.
RSP’s Mean Return is 1.19 points higher than that of DGRO and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than DGRO. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than DGRO’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | DGRO |
| 2020 | 12.75% | 9.47% |
| 2019 | 28.94% | 30.02% |
| 2018 | -7.77% | -2.24% |
| 2017 | 18.52% | 22.84% |
| 2016 | 14.34% | 15.27% |
| 2015 | -2.57% | -0.62% |
| 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 2019 was the strongest year for DGRO, returning 30.02% on an annual basis. The poorest year for DGRO in the last ten years was 2018, with a yield of -2.24%. Most years the iShares Core Dividend Growth ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $17,703 | 13.79% |
| DGRO | $10,000 | $19,580 | 12.46% |
A $10,000 investment in RSP would have resulted in a final balance of $17,703. This is a profit of $7,703 over 6 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in DGRO, the end total would have been $19,580. This equates to a $9,580 profit over 6 years and a compound annual growth rate (CAGR) of 12.46%.
RSP’s CAGR is 1.33 percentage points higher than that of DGRO and as a result, would have yielded $1,877 less on a $10,000 investment. Thus, RSP outperformed DGRO by 1.33% annually.
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