RSP vs. MDY: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between RSP and MDY? And which fund is better?

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

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

Summary

RSP MDY
Name Invesco S&P 500 Equal Weight ETF SPDR S&P MIDCAP 400 ETF Trust
Category Large Blend Mid-Cap Blend
Issuer Invesco SPDR State Street Global Advisors
AUM 28.62B 21.31B
Avg. Return 13.79% 13.29%
Div. Yield 1.31% 0.94%
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 SPDR S&P MIDCAP 400 ETF Trust (MDY) is a Mid-Cap Blend fund that is issued by SPDR State Street Global Advisors. It currently has 21.31B total assets under management and has yielded an average annual return of 13.29% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.23%.

RSP’s dividend yield is 0.37% higher than that of MDY (1.31% vs. 0.94%). Also, RSP yielded on average 0.50% more per year over the past decade (13.79% vs. 13.29%). The expense ratio of RSP is 0.03 percentage points lower than MDY’s (0.2% vs. 0.23%).

Fund Composition

Industry Exposure

RSP vs. MDY - Industry Exposure

RSP MDY
Technology 14.73% 14.74%
Industrials 14.62% 17.88%
Energy 3.9% 2.52%
Communication Services 4.31% 1.63%
Utilities 5.58% 2.84%
Healthcare 13.69% 11.17%
Consumer Defensive 6.86% 4.2%
Real Estate 5.84% 9.66%
Financial Services 13.43% 15.2%
Consumer Cyclical 13.01% 14.89%
Basic Materials 4.04% 5.27%

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 SPDR S&P MIDCAP 400 ETF Trust (MDY) has the most exposure to the Industrials sector at 17.88%. This is followed by Financial Services and Consumer Cyclical at 15.2% and 14.89% respectively. Energy (2.52%), Utilities (2.84%), and Consumer Defensive (4.2%) only make up 9.56% of the fund’s total assets.

MDY’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Consumer Cyclical stocks at 5.27%, 9.66%, 11.17%, 14.74%, and 14.89%.

RSP is 0.01% less exposed to the Technology sector than MDY (14.73% vs 14.74%). RSP’s exposure to Industrials and Healthcare stocks is 3.26% lower and 2.52% higher respectively (14.62% vs. 17.88% and 13.69% vs. 11.17%). In total, Basic Materials, Communication Services, and Utilities also make up 4.19% more of the fund’s holdings compared to MDY (13.93% vs. 9.74%).

Holdings

RSP - 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%.

MDY - Holdings

MDY Holdings Weight
Bio-Techne Corp 0.75%
Molina Healthcare Inc 0.63%
Cognex Corp 0.63%
Fair Isaac Corp 0.62%
XPO Logistics Inc 0.61%
SolarEdge Technologies Inc 0.61%
Signature Bank 0.6%
Graco Inc 0.55%
Camden Property Trust 0.55%
FactSet Research Systems Inc 0.54%

MDY’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and XPO Logistics Inc at 0.75%, 0.63%, 0.63%, 0.62%, and 0.61%.

SolarEdge Technologies Inc (0.61%), Signature Bank (0.6%), and Graco Inc (0.55%) have a slightly smaller but still significant weight. Camden Property Trust and FactSet Research Systems Inc are also represented in the MDY’s holdings at 0.55% and 0.54%.

Risk Analysis

RSP MDY
Mean Return 1.19 1.08
R-squared 94.47 86.66
Std. Deviation 15.36 16.83
Alpha -2.45 -4.1
Beta 1.1 1.15
Sharpe Ratio 0.89 0.73
Treynor Ratio 12.12 9.97

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

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Alpha of -4.1 with a Standard Deviation of 16.83 and a Treynor Ratio of 9.97. Its R-squared is 86.66 while MDY’s Mean Return is 1.08. Furthermore, the fund has a Sharpe Ratio of 0.73 and a Beta of 1.15.

RSP’s Mean Return is 0.11 points higher than that of MDY and its R-squared is 7.81 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than MDY. The Alpha and Beta of RSP are 1.65 points higher and 0.05 points lower than MDY’s Alpha and Beta.

Performance

Annual Returns

RSP vs. MDY - Annual Returns

Year RSP MDY
2020 12.75% 13.51%
2019 28.94% 25.86%
2018 -7.77% -11.28%
2017 18.52% 15.89%
2016 14.34% 20.33%
2015 -2.57% -2.4%
2014 14.02% 9.42%
2013 35.6% 33.08%
2012 17.04% 17.58%
2011 -0.5% -1.99%
2010 21.3% 26.17%

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 MDY, returning 33.08% on an annual basis. The poorest year for MDY in the last ten years was 2018, with a yield of -11.28%. Most years the SPDR S&P MIDCAP 400 ETF Trust has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.51%, 15.89%, and 17.58% respectively.

Portfolio Growth

RSP vs. MDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $38,664 13.79%
MDY $10,000 $36,524 13.29%

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 MDY, the end total would have been $36,524. This equates to a $26,524 profit over 11 years and a compound annual growth rate (CAGR) of 13.29%.

RSP’s CAGR is 0.50 percentage points higher than that of MDY and as a result, would have yielded $2,140 more on a $10,000 investment. Thus, RSP outperformed MDY by 0.50% 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) 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!

2) 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!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply