The Invesco S&P 500 Equal Weight ETF (RSP) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between RSP and SDY? And which fund is better?
The expense ratio of RSP is 0.15 percentage points lower than SDY’s (0.2% vs. 0.35%). RSP also has a higher exposure to the technology sector and a higher standard deviation. Overall, RSP has provided higher returns than SDY over the past ten years.
In this article, we’ll compare RSP vs. SDY. We’ll look at industry exposure and risk metrics, as well as at their holdings and annual returns. Moreover, I’ll also discuss RSP’s and SDY’s performance, portfolio growth, and fund composition and examine how these affect their overall returns.
Summary
| RSP | SDY | |
| Name | Invesco S&P 500 Equal Weight ETF | SPDR S&P Dividend ETF |
| Category | Large Blend | Large Value |
| Issuer | Invesco | SPDR State Street Global Advisors |
| AUM | 28.62B | 19.67B |
| Avg. Return | 13.79% | 12.44% |
| Div. Yield | 1.31% | 2.65% |
| Expense Ratio | 0.2% | 0.35% |
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 SPDR S&P Dividend ETF (SDY) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 19.67B total assets under management and has yielded an average annual return of 12.44% over the past 10 years. The fund has a dividend yield of 2.65% with an expense ratio of 0.35%.
RSP’s dividend yield is 1.34% lower than that of SDY (1.31% vs. 2.65%). Also, RSP yielded on average 1.35% more per year over the past decade (13.79% vs. 12.44%). The expense ratio of RSP is 0.15 percentage points lower than SDY’s (0.2% vs. 0.35%).
Fund Composition
Industry Exposure
| RSP | SDY | |
| Technology | 14.73% | 2.0% |
| Industrials | 14.62% | 15.89% |
| Energy | 3.9% | 5.95% |
| Communication Services | 4.31% | 4.64% |
| Utilities | 5.58% | 12.14% |
| Healthcare | 13.69% | 7.35% |
| Consumer Defensive | 6.86% | 14.01% |
| Real Estate | 5.84% | 6.57% |
| Financial Services | 13.43% | 16.32% |
| Consumer Cyclical | 13.01% | 8.68% |
| Basic Materials | 4.04% | 6.45% |
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 SPDR S&P Dividend ETF (SDY) has the most exposure to the Financial Services sector at 16.32%. This is followed by Industrials and Consumer Defensive at 15.89% and 14.01% respectively. Communication Services (4.64%), Energy (5.95%), and Basic Materials (6.45%) only make up 17.04% of the fund’s total assets.
SDY’s mid-section with moderate exposure is comprised of Real Estate, Healthcare, Consumer Cyclical, Utilities, and Consumer Defensive stocks at 6.57%, 7.35%, 8.68%, 12.14%, and 14.01%.
RSP is 12.73% more exposed to the Technology sector than SDY (14.73% vs 2.0%). RSP’s exposure to Industrials and Healthcare stocks is 1.27% lower and 6.34% higher respectively (14.62% vs. 15.89% and 13.69% vs. 7.35%). In total, Basic Materials, Communication Services, and Utilities also make up 9.30% less of the fund’s holdings compared to SDY (13.93% vs. 23.23%).
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%.
| SDY Holdings | Weight |
| Exxon Mobil Corp | 2.81% |
| AT&T Inc | 2.5% |
| South Jersey Industries Inc | 2.22% |
| Chevron Corp | 2.02% |
| International Business Machines Corp | 2.0% |
| AbbVie Inc | 1.93% |
| National Retail Properties Inc | 1.86% |
| Federal Realty Investment Trust | 1.77% |
| Realty Income Corp | 1.7% |
| Old Republic International Corp | 1.65% |
SDY’s Top Holdings are Exxon Mobil Corp, AT&T Inc, South Jersey Industries Inc, Chevron Corp, and International Business Machines Corp at 2.81%, 2.5%, 2.22%, 2.02%, and 2.0%.
AbbVie Inc (1.93%), National Retail Properties Inc (1.86%), and Federal Realty Investment Trust (1.77%) have a slightly smaller but still significant weight. Realty Income Corp and Old Republic International Corp are also represented in the SDY’s holdings at 1.7% and 1.65%.
Risk Analysis
| RSP | SDY | |
| Mean Return | 1.19 | 1.07 |
| R-squared | 94.47 | 83.62 |
| Std. Deviation | 15.36 | 12.9 |
| Alpha | -2.45 | -0.1 |
| Beta | 1.1 | 0.87 |
| Sharpe Ratio | 0.89 | 0.95 |
| Treynor Ratio | 12.12 | 13.94 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Beta of 1.1 and a Mean Return of 1.19. Its Sharpe Ratio is 0.89 while RSP’s R-squared is 94.47. Furthermore, the fund has a Treynor Ratio of 12.12 and a Alpha of -2.45.
The SPDR S&P Dividend ETF (SDY) has a R-squared of 83.62 with a Sharpe Ratio of 0.95 and a Treynor Ratio of 13.94. Its Beta is 0.87 while SDY’s Mean Return is 1.07. Furthermore, the fund has a Standard Deviation of 12.9 and a Alpha of -0.1.
RSP’s Mean Return is 0.12 points higher than that of SDY and its R-squared is 10.85 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than SDY. The Alpha and Beta of RSP are 2.35 points lower and 0.23 points higher than SDY’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | SDY |
| 2020 | 12.75% | 1.78% |
| 2019 | 28.94% | 23.37% |
| 2018 | -7.77% | -2.73% |
| 2017 | 18.52% | 15.84% |
| 2016 | 14.34% | 20.17% |
| 2015 | -2.57% | -0.7% |
| 2014 | 14.02% | 13.8% |
| 2013 | 35.6% | 30.09% |
| 2012 | 17.04% | 11.51% |
| 2011 | -0.5% | 7.28% |
| 2010 | 21.3% | 16.41% |
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 SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| SDY | $10,000 | $34,806 | 12.44% |
A $10,000 investment in RSP would have resulted in a final balance of $38,664. This is a profit of $28,664 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in SDY, the end total would have been $34,806. This equates to a $24,806 profit over 11 years and a compound annual growth rate (CAGR) of 12.44%.
RSP’s CAGR is 1.35 percentage points higher than that of SDY and as a result, would have yielded $3,858 more on a $10,000 investment. Thus, RSP outperformed SDY by 1.35% annually.
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