The Invesco S&P 500 Equal Weight ETF (RSP) and the Schwab U.S. TIPS ETF (SCHP) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and SCHP is a Schwab ETFs Inflation-Protected Bond fund. So, what’s the difference between RSP and SCHP? And which fund is better?
The expense ratio of RSP is 0.15 percentage points higher than SCHP’s (0.2% vs. 0.05%). RSP also has a high exposure to the technology sector while SCHP is mostly comprised of AAA bonds. Overall, RSP has provided higher returns than SCHP over the past ten years.
In this article, we’ll compare RSP vs. SCHP. We’ll look at holdings and annual returns, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss RSP’s and SCHP’s industry exposure, portfolio growth, and performance and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Schwab U.S. TIPS ETF|
|Category||Large Blend||Inflation-Protected Bond|
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. TIPS ETF (SCHP) is a Inflation-Protected Bond fund that is issued by Schwab ETFs. It currently has 18.41B total assets under management and has yielded an average annual return of 3.92% over the past 10 years. The fund has a dividend yield of 1.97% with an expense ratio of 0.05%.
RSP’s dividend yield is 0.66% lower than that of SCHP (1.31% vs. 1.97%). Also, RSP yielded on average 9.87% more per year over the past decade (13.79% vs. 3.92%). The expense ratio of RSP is 0.15 percentage points higher than SCHP’s (0.2% vs. 0.05%).
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|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%.
|SCHP Bond Sectors||Weight|
SCHP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 100.0%, 0.0%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
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The Invesco S&P 500 Equal Weight ETF (RSP) has a Beta of 1.1 with a Standard Deviation of 15.36 and a Alpha of -2.45. Its R-squared is 94.47 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Mean Return of 1.19 and a Treynor Ratio of 12.12.
The Schwab U.S. TIPS ETF (SCHP) has a Treynor Ratio of 2.31 with a Sharpe Ratio of 0.64 and a Alpha of -0.5. Its Standard Deviation is 4.32 while SCHP’s Beta is 1.17. Furthermore, the fund has a Mean Return of 0.28 and a R-squared of 66.16.
RSP’s Mean Return is 0.91 points higher than that of SCHP and its R-squared is 28.31 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than SCHP. The Alpha and Beta of RSP are 1.95 points lower and 0.07 points lower than SCHP’s Alpha and Beta.
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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 2011 was the strongest year for SCHP, returning 13.38% on an annual basis. The poorest year for SCHP in the last ten years was 2013, with a yield of -8.66%. Most years the Schwab U.S. TIPS ETF has given investors modest returns, such as in 2017, 2014, and 2016, when gains were 2.95%, 3.56%, and 4.6% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 SCHP, the end total would have been $14,418. This equates to a $4,418 profit over 10 years and a compound annual growth rate (CAGR) of 3.92%.
RSP’s CAGR is 9.87 percentage points higher than that of SCHP and as a result, would have yielded $17,457 more on a $10,000 investment. Thus, RSP outperformed SCHP by 9.87% annually.
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