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.
Summary
| RSP | IWS | |
| Name | Invesco S&P 500 Equal Weight ETF | iShares Russell Mid-Cap Value ETF |
| Category | Large Blend | Mid-Cap Value |
| Issuer | Invesco | iShares |
| AUM | 28.62B | 14.24B |
| Avg. Return | 13.79% | 12.35% |
| Div. Yield | 1.31% | 1.34% |
| Expense Ratio | 0.2% | 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%).
Fund Composition
Industry Exposure
| RSP | IWS | |
| Technology | 14.73% | 11.39% |
| Industrials | 14.62% | 14.6% |
| Energy | 3.9% | 4.71% |
| Communication Services | 4.31% | 4.08% |
| Utilities | 5.58% | 6.97% |
| Healthcare | 13.69% | 8.56% |
| Consumer Defensive | 6.86% | 4.76% |
| Real Estate | 5.84% | 11.71% |
| Financial Services | 13.43% | 15.75% |
| Consumer Cyclical | 13.01% | 12.07% |
| Basic Materials | 4.04% | 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 | 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%.
| IWS Holdings | Weight |
| Twitter Inc | 0.69% |
| Marvell Technology Inc | 0.69% |
| IHS Markit Ltd | 0.62% |
| Prudential Financial Inc | 0.56% |
| Otis Worldwide Corp Ordinary Shares | 0.54% |
| International Flavors & Fragrances Inc | 0.53% |
| Xcel Energy Inc | 0.52% |
| Motorola Solutions Inc | 0.52% |
| Aptiv PLC | 0.52% |
| Aflac Inc | 0.52% |
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%.
Risk Analysis
| RSP | IWS | |
| Mean Return | 1.19 | 1.06 |
| R-squared | 94.47 | 87.04 |
| Std. Deviation | 15.36 | 16.03 |
| Alpha | -2.45 | -4.11 |
| Beta | 1.1 | 1.1 |
| Sharpe Ratio | 0.89 | 0.75 |
| Treynor Ratio | 12.12 | 10.3 |
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.
Performance
Annual Returns
| Year | RSP | IWS |
| 2020 | 12.75% | 4.76% |
| 2019 | 28.94% | 26.78% |
| 2018 | -7.77% | -12.36% |
| 2017 | 18.52% | 13.1% |
| 2016 | 14.34% | 19.69% |
| 2015 | -2.57% | -4.93% |
| 2014 | 14.02% | 14.49% |
| 2013 | 35.6% | 33.11% |
| 2012 | 17.04% | 18.27% |
| 2011 | -0.5% | -1.55% |
| 2010 | 21.3% | 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
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| IWS | $10,000 | $33,083 | 12.35% |
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.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
