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RSP vs. IWS: What’s The Difference?

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

The expense ratio of RSP is 0.03 percentage points lower than IWS’s (0.2% vs. 0.23%). RSP also has a higher exposure to the technology sector and a lower standard deviation. Overall, RSP has provided higher returns than IWS over the past ten years.

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

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Summary

RSPIWS
NameInvesco S&P 500 Equal Weight ETFiShares Russell Mid-Cap Value ETF
CategoryLarge BlendMid-Cap Value
IssuerInvescoiShares
AUM28.62B14.24B
Avg. Return13.79%12.35%
Div. Yield1.31%1.34%
Expense Ratio0.2%0.23%

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 Russell Mid-Cap Value ETF (IWS) is a Mid-Cap Value fund that is issued by iShares. It currently has 14.24B total assets under management and has yielded an average annual return of 12.35% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.23%.

RSP’s dividend yield is 0.03% lower than that of IWS (1.31% vs. 1.34%). Also, RSP yielded on average 1.44% more per year over the past decade (13.79% vs. 12.35%). The expense ratio of RSP is 0.03 percentage points lower than IWS’s (0.2% vs. 0.23%).

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Fund Composition

Industry Exposure

RSP vs. IWS - Industry Exposure

RSPIWS
Technology14.73%11.39%
Industrials14.62%14.6%
Energy3.9%4.71%
Communication Services4.31%4.08%
Utilities5.58%6.97%
Healthcare13.69%8.56%
Consumer Defensive6.86%4.76%
Real Estate5.84%11.71%
Financial Services13.43%15.75%
Consumer Cyclical13.01%12.07%
Basic Materials4.04%5.4%

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 Russell Mid-Cap Value ETF (IWS) has the most exposure to the Financial Services sector at 15.75%. This is followed by Industrials and Consumer Cyclical at 14.6% and 12.07% respectively. Energy (4.71%), Consumer Defensive (4.76%), and Basic Materials (5.4%) only make up 14.87% of the fund’s total assets.

IWS’s mid-section with moderate exposure is comprised of Utilities, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.97%, 8.56%, 11.39%, 11.71%, and 12.07%.

RSP is 3.34% more exposed to the Technology sector than IWS (14.73% vs 11.39%). RSP’s exposure to Industrials and Healthcare stocks is 0.02% higher and 5.13% higher respectively (14.62% vs. 14.6% and 13.69% vs. 8.56%). In total, Basic Materials, Communication Services, and Utilities also make up 2.52% less of the fund’s holdings compared to IWS (13.93% vs. 16.45%).

Holdings

RSP - Holdings

RSP HoldingsWeight
Chipotle Mexican Grill Inc0.27%
Nike Inc Class B0.25%
MSCI Inc0.25%
Monolithic Power Systems Inc0.25%
Enphase Energy Inc0.25%
Advanced Micro Devices Inc0.25%
ResMed Inc0.24%
PerkinElmer Inc0.24%
IDEXX Laboratories Inc0.24%
Danaher Corp0.24%

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%.

IWS - Holdings

IWS HoldingsWeight
Twitter Inc0.69%
Marvell Technology Inc0.69%
IHS Markit Ltd0.62%
Prudential Financial Inc0.56%
Otis Worldwide Corp Ordinary Shares0.54%
International Flavors & Fragrances Inc0.53%
Xcel Energy Inc0.52%
Motorola Solutions Inc0.52%
Aptiv PLC0.52%
Aflac Inc0.52%

IWS’s Top Holdings are Twitter Inc, Marvell Technology Inc, IHS Markit Ltd, Prudential Financial Inc, and Otis Worldwide Corp Ordinary Shares at 0.69%, 0.69%, 0.62%, 0.56%, and 0.54%.

International Flavors & Fragrances Inc (0.53%), Xcel Energy Inc (0.52%), and Motorola Solutions Inc (0.52%) have a slightly smaller but still significant weight. Aptiv PLC and Aflac Inc are also represented in the IWS’s holdings at 0.52% and 0.52%.

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Risk Analysis

RSPIWS
Mean Return1.191.06
R-squared94.4787.04
Std. Deviation15.3616.03
Alpha-2.45-4.11
Beta1.11.1
Sharpe Ratio0.890.75
Treynor Ratio12.1210.3

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

The iShares Russell Mid-Cap Value ETF (IWS) has a Treynor Ratio of 10.3 with a R-squared of 87.04 and a Mean Return of 1.06. Its Beta is 1.1 while IWS’s Sharpe Ratio is 0.75. Furthermore, the fund has a Alpha of -4.11 and a Standard Deviation of 16.03.

RSP’s Mean Return is 0.13 points higher than that of IWS and its R-squared is 7.43 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than IWS. The Alpha and Beta of RSP are 1.66 points higher and 0.00 points lower than IWS’s Alpha and Beta.

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Performance

Annual Returns

RSP vs. IWS - Annual Returns

YearRSPIWS
202012.75%4.76%
201928.94%26.78%
2018-7.77%-12.36%
201718.52%13.1%
201614.34%19.69%
2015-2.57%-4.93%
201414.02%14.49%
201335.6%33.11%
201217.04%18.27%
2011-0.5%-1.55%
201021.3%24.46%

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 IWS, returning 33.11% on an annual basis. The poorest year for IWS in the last ten years was 2018, with a yield of -12.36%. Most years the iShares Russell Mid-Cap Value ETF has given investors modest returns, such as in 2017, 2014, and 2012, when gains were 13.1%, 14.49%, and 18.27% respectively.

Portfolio Growth

RSP vs. IWS - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
RSP$10,000$38,66413.79%
IWS$10,000$33,08312.35%

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 IWS, the end total would have been $33,083. This equates to a $23,083 profit over 11 years and a compound annual growth rate (CAGR) of 12.35%.

RSP’s CAGR is 1.44 percentage points higher than that of IWS and as a result, would have yielded $5,581 more on a $10,000 investment. Thus, RSP outperformed IWS by 1.44% annually.


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