The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares MBS ETF (MBB) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and MBB is a iShares Intermediate Government fund. So, what’s the difference between RSP and MBB? And which fund is better?
The expense ratio of RSP is 0.14 percentage points higher than MBB’s (0.2% vs. 0.06%). RSP also has a high exposure to the technology sector while MBB is mostly comprised of AAA bonds. Overall, RSP has provided higher returns than MBB over the past ten years.
In this article, we’ll compare RSP vs. MBB. We’ll look at risk metrics and annual returns, as well as at their performance and portfolio growth. Moreover, I’ll also discuss RSP’s and MBB’s fund composition, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| RSP | MBB | |
| Name | Invesco S&P 500 Equal Weight ETF | iShares MBS ETF |
| Category | Large Blend | Intermediate Government |
| Issuer | Invesco | iShares |
| AUM | 28.62B | 25.69B |
| Avg. Return | 13.79% | 3.08% |
| Div. Yield | 1.31% | 1.88% |
| Expense Ratio | 0.2% | 0.06% |
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 MBS ETF (MBB) is a Intermediate Government fund that is issued by iShares. It currently has 25.69B total assets under management and has yielded an average annual return of 3.08% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.06%.
RSP’s dividend yield is 0.57% lower than that of MBB (1.31% vs. 1.88%). Also, RSP yielded on average 10.71% more per year over the past decade (13.79% vs. 3.08%). The expense ratio of RSP is 0.14 percentage points higher than MBB’s (0.2% vs. 0.06%).
Fund Composition
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%.
| MBB Bond Sectors | Weight |
| AAA | 99.51% |
| Others | 0.49% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
MBB’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.51%, 0.49%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| RSP | MBB | |
| Mean Return | 1.19 | 0.2 |
| R-squared | 94.47 | 74.38 |
| Std. Deviation | 15.36 | 2.12 |
| Alpha | -2.45 | 0.14 |
| Beta | 1.1 | 0.6 |
| Sharpe Ratio | 0.89 | 0.87 |
| Treynor Ratio | 12.12 | 3.02 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Beta of 1.1 and a Alpha of -2.45. Its Treynor Ratio is 12.12 while RSP’s Mean Return is 1.19. Furthermore, the fund has a R-squared of 94.47 and a Sharpe Ratio of 0.89.
The iShares MBS ETF (MBB) has a Mean Return of 0.2 with a Sharpe Ratio of 0.87 and a R-squared of 74.38. Its Beta is 0.6 while MBB’s Alpha is 0.14. Furthermore, the fund has a Treynor Ratio of 3.02 and a Standard Deviation of 2.12.
RSP’s Mean Return is 0.99 points higher than that of MBB and its R-squared is 20.09 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than MBB. The Alpha and Beta of RSP are 2.59 points lower and 0.50 points higher than MBB’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | MBB |
| 2020 | 12.75% | 4.03% |
| 2019 | 28.94% | 6.27% |
| 2018 | -7.77% | 0.81% |
| 2017 | 18.52% | 2.37% |
| 2016 | 14.34% | 1.28% |
| 2015 | -2.57% | 1.28% |
| 2014 | 14.02% | 6.16% |
| 2013 | 35.6% | -1.92% |
| 2012 | 17.04% | 2.23% |
| 2011 | -0.5% | 5.88% |
| 2010 | 21.3% | 5.44% |
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 MBB, returning 6.27% on an annual basis. The poorest year for MBB in the last ten years was 2013, with a yield of -1.92%. Most years the iShares MBS ETF has given investors modest returns, such as in 2012, 2017, and 2020, when gains were 2.23%, 2.37%, and 4.03% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| MBB | $10,000 | $13,906 | 3.08% |
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 MBB, the end total would have been $13,906. This equates to a $3,906 profit over 11 years and a compound annual growth rate (CAGR) of 3.08%.
RSP’s CAGR is 10.71 percentage points higher than that of MBB and as a result, would have yielded $24,758 more on a $10,000 investment. Thus, RSP outperformed MBB by 10.71% annually.
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