The Invesco S&P 500 Equal Weight ETF (RSP) and the Schwab U.S. Small-Cap ETF (SCHA) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and SCHA is a Schwab ETFs Small Blend fund. So, what’s the difference between RSP and SCHA? And which fund is better?
The expense ratio of RSP is 0.16 percentage points higher than SCHA’s (0.2% vs. 0.04%). RSP also has a lower exposure to the technology sector and a lower standard deviation. Overall, RSP has provided higher returns than SCHA over the past ten years.
In this article, we’ll compare RSP vs. SCHA. We’ll look at industry exposure and risk metrics, as well as at their annual returns and portfolio growth. Moreover, I’ll also discuss RSP’s and SCHA’s holdings, fund composition, and performance and examine how these affect their overall returns.
Summary
| RSP | SCHA | |
| Name | Invesco S&P 500 Equal Weight ETF | Schwab U.S. Small-Cap ETF |
| Category | Large Blend | Small Blend |
| Issuer | Invesco | Schwab ETFs |
| AUM | 28.62B | 16.51B |
| Avg. Return | 13.79% | 12.62% |
| Div. Yield | 1.31% | 0.98% |
| Expense Ratio | 0.2% | 0.04% |
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 Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.
RSP’s dividend yield is 0.33% higher than that of SCHA (1.31% vs. 0.98%). Also, RSP yielded on average 1.17% more per year over the past decade (13.79% vs. 12.62%). The expense ratio of RSP is 0.16 percentage points higher than SCHA’s (0.2% vs. 0.04%).
Fund Composition
Industry Exposure
| RSP | SCHA | |
| Technology | 14.73% | 14.91% |
| Industrials | 14.62% | 15.37% |
| Energy | 3.9% | 3.35% |
| Communication Services | 4.31% | 3.5% |
| Utilities | 5.58% | 1.83% |
| Healthcare | 13.69% | 16.5% |
| Consumer Defensive | 6.86% | 3.75% |
| Real Estate | 5.84% | 7.83% |
| Financial Services | 13.43% | 14.49% |
| Consumer Cyclical | 13.01% | 14.48% |
| Basic Materials | 4.04% | 3.98% |
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 Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.
SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.
RSP is 0.18% less exposed to the Technology sector than SCHA (14.73% vs 14.91%). RSP’s exposure to Industrials and Healthcare stocks is 0.75% lower and 2.81% lower respectively (14.62% vs. 15.37% and 13.69% vs. 16.5%). In total, Basic Materials, Communication Services, and Utilities also make up 4.62% more of the fund’s holdings compared to SCHA (13.93% vs. 9.31%).
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%.
| SCHA Holdings | Weight |
| AMC Entertainment Holdings Inc Class A | 0.67% |
| Caesars Entertainment Inc | 0.51% |
| Cloudflare Inc | 0.48% |
| NovoCure Ltd | 0.45% |
| Plug Power Inc | 0.41% |
| 10x Genomics Inc Ordinary Shares – Class A | 0.34% |
| GameStop Corp Class A | 0.28% |
| RH | 0.27% |
| Penn National Gaming Inc | 0.27% |
| Axon Enterprise Inc | 0.27% |
SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.
10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.
Risk Analysis
| RSP | SCHA | |
| Mean Return | 1.19 | 1.14 |
| R-squared | 94.47 | 82.26 |
| Std. Deviation | 15.36 | 18.68 |
| Alpha | -2.45 | -4.65 |
| Beta | 1.1 | 1.25 |
| Sharpe Ratio | 0.89 | 0.7 |
| Treynor Ratio | 12.12 | 9.62 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a R-squared of 94.47 with a Alpha of -2.45 and a Mean Return of 1.19. Its Standard Deviation is 15.36 while RSP’s Beta is 1.1. Furthermore, the fund has a Sharpe Ratio of 0.89 and a Treynor Ratio of 12.12.
The Schwab U.S. Small-Cap ETF (SCHA) has a Beta of 1.25 with a R-squared of 82.26 and a Alpha of -4.65. Its Sharpe Ratio is 0.7 while SCHA’s Treynor Ratio is 9.62. Furthermore, the fund has a Standard Deviation of 18.68 and a Mean Return of 1.14.
RSP’s Mean Return is 0.05 points higher than that of SCHA and its R-squared is 12.21 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than SCHA. The Alpha and Beta of RSP are 2.20 points higher and 0.15 points lower than SCHA’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | SCHA |
| 2020 | 12.75% | 19.35% |
| 2019 | 28.94% | 26.54% |
| 2018 | -7.77% | -11.75% |
| 2017 | 18.52% | 15.04% |
| 2016 | 14.34% | 19.88% |
| 2015 | -2.57% | -4.24% |
| 2014 | 14.02% | 6.53% |
| 2013 | 35.6% | 39.59% |
| 2012 | 17.04% | 18.24% |
| 2011 | -0.5% | -2.95% |
| 2010 | 21.3% | 28.31% |
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 SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $31,875 | 13.79% |
| SCHA | $10,000 | $30,035 | 12.62% |
A $10,000 investment in RSP would have resulted in a final balance of $31,875. This is a profit of $21,875 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.
RSP’s CAGR is 1.17 percentage points higher than that of SCHA and as a result, would have yielded $1,840 more on a $10,000 investment. Thus, RSP outperformed SCHA by 1.17% annually.
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