The Invesco S&P 500 Equal Weight ETF (RSP) and the Schwab U.S. Dividend Equity ETF (SCHD) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and SCHD is a Schwab ETFs Large Value fund. So, what’s the difference between RSP and SCHD? And which fund is better?
The expense ratio of RSP is 0.14 percentage points higher than SCHD’s (0.2% vs. 0.06%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than SCHD over the past ten years.
In this article, we’ll compare RSP vs. SCHD. We’ll look at annual returns and holdings, as well as at their performance and risk metrics. Moreover, I’ll also discuss RSP’s and SCHD’s industry exposure, portfolio growth, and fund composition and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Schwab U.S. Dividend Equity ETF|
|Category||Large Blend||Large Value|
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. Dividend Equity ETF (SCHD) is a Large Value fund that is issued by Schwab ETFs. It currently has 26B total assets under management and has yielded an average annual return of 14.80% over the past 10 years. The fund has a dividend yield of 2.89% with an expense ratio of 0.06%.
RSP’s dividend yield is 1.58% lower than that of SCHD (1.31% vs. 2.89%). Also, RSP yielded on average 1.01% less per year over the past decade (13.79% vs. 14.80%). The expense ratio of RSP is 0.14 percentage points higher than SCHD’s (0.2% vs. 0.06%).
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. Dividend Equity ETF (SCHD) has the most exposure to the Financial Services sector at 21.69%. This is followed by Industrials and Technology at 18.05% and 16.26% respectively. Utilities (0.0%), Energy (1.87%), and Basic Materials (2.13%) only make up 4.00% of the fund’s total assets.
SCHD’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Healthcare, Consumer Defensive, and Technology stocks at 4.96%, 8.36%, 12.64%, 14.04%, and 16.26%.
RSP is 1.53% less exposed to the Technology sector than SCHD (14.73% vs 16.26%). RSP’s exposure to Industrials and Healthcare stocks is 3.43% lower and 1.05% higher respectively (14.62% vs. 18.05% and 13.69% vs. 12.64%). In total, Basic Materials, Communication Services, and Utilities also make up 6.84% more of the fund’s holdings compared to SCHD (13.93% vs. 7.09%).
|Chipotle Mexican Grill Inc||0.27%|
|Nike Inc Class B||0.25%|
|Monolithic Power Systems Inc||0.25%|
|Enphase Energy Inc||0.25%|
|Advanced Micro Devices Inc||0.25%|
|IDEXX Laboratories Inc||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%.
|Merck & Co Inc||4.24%|
|The Home Depot Inc||4.19%|
|Texas Instruments Inc||4.16%|
|Verizon Communications Inc||3.96%|
|Cisco Systems Inc||3.96%|
SCHD’s Top Holdings are Merck & Co Inc, The Home Depot Inc, Texas Instruments Inc, Broadcom Inc, and Amgen Inc at 4.24%, 4.19%, 4.16%, 4.15%, and 4.11%.
PepsiCo Inc (4.09%), BlackRock Inc (4.05%), and Pfizer Inc (3.97%) have a slightly smaller but still significant weight. Verizon Communications Inc and Cisco Systems Inc are also represented in the SCHD’s holdings at 3.96% and 3.96%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a R-squared of 94.47 with a Standard Deviation of 15.36 and a Treynor Ratio of 12.12. Its Mean Return is 1.19 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Beta of 1.1 and a Alpha of -2.45.
The Schwab U.S. Dividend Equity ETF (SCHD) has a Sharpe Ratio of 0 with a Mean Return of 0 and a R-squared of 0. Its Alpha is 0 while SCHD’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a Treynor Ratio of 0.
RSP’s Mean Return is 1.19 points higher than that of SCHD and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than SCHD. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than SCHD’s Alpha and Beta.
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 SCHD, returning 32.9% on an annual basis. The poorest year for SCHD in the last ten years was 2018, with a yield of -5.46%. Most years the Schwab U.S. Dividend Equity ETF has given investors modest returns, such as in 2012, 2014, and 2020, when gains were 11.4%, 11.66%, and 15.11% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in RSP would have resulted in a final balance of $27,371. This is a profit of $17,371 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in SCHD, the end total would have been $28,823. This equates to a $18,823 profit over 8 years and a compound annual growth rate (CAGR) of 14.80%.
RSP’s CAGR is 1.01 percentage points lower than that of SCHD and as a result, would have yielded $1,452 less on a $10,000 investment. Thus, RSP performed worse than SCHD by 1.01% annually.
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