RSP vs. SCHB: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the Schwab U.S. Broad Market ETF (SCHB) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and SCHB is a Schwab ETFs Large Blend fund. So, what’s the difference between RSP and SCHB? And which fund is better?

The expense ratio of RSP is 0.17 percentage points higher than SCHB’s (0.2% vs. 0.03%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than SCHB over the past ten years.

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

Summary

RSP SCHB
Name Invesco S&P 500 Equal Weight ETF Schwab U.S. Broad Market ETF
Category Large Blend Large Blend
Issuer Invesco Schwab ETFs
AUM 28.62B 21.44B
Avg. Return 13.79% 14.43%
Div. Yield 1.31% 1.39%
Expense Ratio 0.2% 0.03%

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. Broad Market ETF (SCHB) is a Large Blend fund that is issued by Schwab ETFs. It currently has 21.44B total assets under management and has yielded an average annual return of 14.43% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.03%.

RSP’s dividend yield is 0.08% lower than that of SCHB (1.31% vs. 1.39%). Also, RSP yielded on average 0.64% less per year over the past decade (13.79% vs. 14.43%). The expense ratio of RSP is 0.17 percentage points higher than SCHB’s (0.2% vs. 0.03%).

Fund Composition

Industry Exposure

RSP vs. SCHB - Industry Exposure

RSP SCHB
Technology 14.73% 24.15%
Industrials 14.62% 9.29%
Energy 3.9% 2.78%
Communication Services 4.31% 10.52%
Utilities 5.58% 2.32%
Healthcare 13.69% 13.37%
Consumer Defensive 6.86% 5.76%
Real Estate 5.84% 3.58%
Financial Services 13.43% 13.88%
Consumer Cyclical 13.01% 11.9%
Basic Materials 4.04% 2.45%

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. Broad Market ETF (SCHB) has the most exposure to the Technology sector at 24.15%. This is followed by Financial Services and Healthcare at 13.88% and 13.37% respectively. Basic Materials (2.45%), Energy (2.78%), and Real Estate (3.58%) only make up 8.81% of the fund’s total assets.

SCHB’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.76%, 9.29%, 10.52%, 11.9%, and 13.37%.

RSP is 9.42% less exposed to the Technology sector than SCHB (14.73% vs 24.15%). RSP’s exposure to Industrials and Healthcare stocks is 5.33% higher and 0.32% higher respectively (14.62% vs. 9.29% and 13.69% vs. 13.37%). In total, Basic Materials, Communication Services, and Utilities also make up 1.36% less of the fund’s holdings compared to SCHB (13.93% vs. 15.29%).

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%.

SCHB - Holdings

SCHB Holdings Weight
Apple Inc 4.86%
Microsoft Corp 4.61%
Amazon.com Inc 3.33%
Facebook Inc A 1.88%
Alphabet Inc A 1.66%
Alphabet Inc Class C 1.61%
Berkshire Hathaway Inc Class B 1.19%
Tesla Inc 1.18%
NVIDIA Corp 1.13%
JPMorgan Chase & Co 1.06%

SCHB’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 4.86%, 4.61%, 3.33%, 1.88%, and 1.66%.

Alphabet Inc Class C (1.61%), Berkshire Hathaway Inc Class B (1.19%), and Tesla Inc (1.18%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SCHB’s holdings at 1.13% and 1.06%.

Risk Analysis

RSP SCHB
Mean Return 1.19 1.23
R-squared 94.47 99.33
Std. Deviation 15.36 14.12
Alpha -2.45 -0.58
Beta 1.1 1.04
Sharpe Ratio 0.89 1
Treynor Ratio 12.12 13.58

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

The Schwab U.S. Broad Market ETF (SCHB) has a Mean Return of 1.23 with a R-squared of 99.33 and a Standard Deviation of 14.12. Its Beta is 1.04 while SCHB’s Sharpe Ratio is 1. Furthermore, the fund has a Alpha of -0.58 and a Treynor Ratio of 13.58.

RSP’s Mean Return is 0.04 points lower than that of SCHB and its R-squared is 4.86 points lower. With a Standard Deviation of 15.36, RSP is slightly more volatile than SCHB. The Alpha and Beta of RSP are 1.87 points lower and 0.06 points higher than SCHB’s Alpha and Beta.

Performance

Annual Returns

RSP vs. SCHB - Annual Returns

Year RSP SCHB
2020 12.75% 20.77%
2019 28.94% 30.94%
2018 -7.77% -5.25%
2017 18.52% 21.18%
2016 14.34% 12.56%
2015 -2.57% 0.45%
2014 14.02% 12.67%
2013 35.6% 33.37%
2012 17.04% 16.22%
2011 -0.5% 1.4%
2010 21.3% 17.1%

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 SCHB, returning 33.37% on an annual basis. The poorest year for SCHB in the last ten years was 2018, with a yield of -5.25%. Most years the Schwab U.S. Broad Market ETF has given investors modest returns, such as in 2014, 2012, and 2010, when gains were 12.67%, 16.22%, and 17.1% respectively.

Portfolio Growth

RSP vs. SCHB - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $31,875 13.79%
SCHB $10,000 $36,354 14.43%

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 SCHB, the end total would have been $36,354. This equates to a $26,354 profit over 10 years and a compound annual growth rate (CAGR) of 14.43%.

RSP’s CAGR is 0.64 percentage points lower than that of SCHB and as a result, would have yielded $4,479 less on a $10,000 investment. Thus, RSP performed worse than SCHB by 0.64% annually.


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