RSP vs. MTUM: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and MTUM is a iShares Large Growth fund. So, what’s the difference between RSP and MTUM? And which fund is better?

The expense ratio of RSP is 0.05 percentage points higher than MTUM’s (0.2% vs. 0.15%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than MTUM over the past ten years.

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

Summary

RSP MTUM
Name Invesco S&P 500 Equal Weight ETF iShares MSCI USA Momentum Factor ETF
Category Large Blend Large Growth
Issuer Invesco iShares
AUM 28.62B 14.53B
Avg. Return 13.79% 17.37%
Div. Yield 1.31% 0.44%
Expense Ratio 0.2% 0.15%

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 MSCI USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

RSP’s dividend yield is 0.87% higher than that of MTUM (1.31% vs. 0.44%). Also, RSP yielded on average 3.58% less per year over the past decade (13.79% vs. 17.37%). The expense ratio of RSP is 0.05 percentage points higher than MTUM’s (0.2% vs. 0.15%).

Fund Composition

Industry Exposure

RSP vs. MTUM - Industry Exposure

RSP MTUM
Technology 14.73% 15.24%
Industrials 14.62% 12.47%
Energy 3.9% 1.77%
Communication Services 4.31% 13.18%
Utilities 5.58% 0.19%
Healthcare 13.69% 6.41%
Consumer Defensive 6.86% 2.88%
Real Estate 5.84% 0.43%
Financial Services 13.43% 34.32%
Consumer Cyclical 13.01% 9.96%
Basic Materials 4.04% 3.15%

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 MSCI USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.

MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.

RSP is 0.51% less exposed to the Technology sector than MTUM (14.73% vs 15.24%). RSP’s exposure to Industrials and Healthcare stocks is 2.15% higher and 7.28% higher respectively (14.62% vs. 12.47% and 13.69% vs. 6.41%). In total, Basic Materials, Communication Services, and Utilities also make up 2.59% less of the fund’s holdings compared to MTUM (13.93% vs. 16.52%).

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%.

MTUM - Holdings

MTUM Holdings Weight
Tesla Inc 5.63%
The Walt Disney Co 4.39%
JPMorgan Chase & Co 4.35%
Berkshire Hathaway Inc Class B 4.34%
Bank of America Corp 3.81%
PayPal Holdings Inc 3.76%
Wells Fargo & Co 3.05%
Applied Materials Inc 3.05%
Moderna Inc 2.89%
Alphabet Inc Class C 2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

Risk Analysis

RSP MTUM
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 Treynor Ratio of 12.12 with a Mean Return of 1.19 and a R-squared of 94.47. Its Alpha is -2.45 while RSP’s Beta is 1.1. Furthermore, the fund has a Sharpe Ratio of 0.89 and a Standard Deviation of 15.36.

The iShares MSCI USA Momentum Factor ETF (MTUM) has a R-squared of 0 with a Treynor Ratio of 0 and a Alpha of 0. Its Standard Deviation is 0 while MTUM’s Mean Return is 0. Furthermore, the fund has a Beta of 0 and a Sharpe Ratio of 0.

RSP’s Mean Return is 1.19 points higher than that of MTUM and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than MTUM. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than MTUM’s Alpha and Beta.

Performance

Annual Returns

RSP vs. MTUM - Annual Returns

Year RSP MTUM
2020 12.75% 29.69%
2019 28.94% 27.57%
2018 -7.77% -1.77%
2017 18.52% 37.6%
2016 14.34% 4.89%
2015 -2.57% 9.12%
2014 14.02% 14.48%
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 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

RSP vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $20,185 13.79%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in RSP would have resulted in a final balance of $20,185. This is a profit of $10,185 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.79%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

RSP’s CAGR is 3.58 percentage points lower than that of MTUM and as a result, would have yielded $9,116 less on a $10,000 investment. Thus, RSP performed worse than MTUM by 3.58% annually.


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