The Invesco S&P 500 Equal Weight ETF (RSP) and the ProShares UltraPro QQQ (TQQQ) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and TQQQ is a ProShares Trading–Leveraged Equity fund. So, what’s the difference between RSP and TQQQ? And which fund is better?
The expense ratio of RSP is 0.75 percentage points lower than TQQQ’s (0.2% vs. 0.95%). RSP also has a higher exposure to the technology sector and a lower standard deviation. Overall, RSP has provided lower returns than TQQQ over the past ten years.
In this article, we’ll compare RSP vs. TQQQ. We’ll look at performance and portfolio growth, as well as at their fund composition and risk metrics. Moreover, I’ll also discuss RSP’s and TQQQ’s annual returns, holdings, and industry exposure and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||ProShares UltraPro QQQ|
|Category||Large Blend||Trading–Leveraged Equity|
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 ProShares UltraPro QQQ (TQQQ) is a Trading–Leveraged Equity fund that is issued by ProShares. It currently has 12.41B total assets under management and has yielded an average annual return of 61.22% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.95%.
RSP’s dividend yield is 1.31% higher than that of TQQQ (1.31% vs. 0.0%). Also, RSP yielded on average 47.43% less per year over the past decade (13.79% vs. 61.22%). The expense ratio of RSP is 0.75 percentage points lower than TQQQ’s (0.2% vs. 0.95%).
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 ProShares UltraPro QQQ (TQQQ) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
TQQQ’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Energy stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
RSP is 14.73% more exposed to the Technology sector than TQQQ (14.73% vs 0.0%). RSP’s exposure to Industrials and Healthcare stocks is 14.62% higher and 13.69% higher respectively (14.62% vs. 0.0% and 13.69% vs. 0.0%). In total, Basic Materials, Communication Services, and Utilities also make up 13.93% more of the fund’s holdings compared to TQQQ (13.93% vs. 0.00%).
|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%.
|Nasdaq 100 Index Swap Goldman Sachs International||45.11%|
|Nasdaq 100 Index Swap Societe Generale||44.73%|
|Nasdaq 100 Index Swap Bnp Paribas||38.05%|
|Nasdaq 100 Index Swap Bank Of America Na||31.53%|
|Nasdaq 100 Index Swap Citibank Na||31.49%|
|Nasdaq 100 Index Swap Jp Morgan Securities||26.2%|
|Nasdaq 100 Index Swap Credit Suisse International||5.9%|
TQQQ’s Top Holdings are Nasdaq 100 Index Swap Goldman Sachs International, Nasdaq 100 Index Swap Societe Generale, Nasdaq 100 Index Swap Bnp Paribas, Nasdaq 100 Index Swap Bank Of America Na, and Nasdaq 100 Index Swap Citibank Na at 45.11%, 44.73%, 38.05%, 31.53%, and 31.49%.
Nasdaq 100 Index Swap Jp Morgan Securities (26.2%), Apple Inc (7.49%), and Microsoft Corp (6.69%) have a slightly smaller but still significant weight. Nasdaq 100 Index Swap Credit Suisse International and Amazon.com Inc are also represented in the TQQQ’s holdings at 5.9% and 5.68%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a R-squared of 94.47 with a Mean Return of 1.19 and a Treynor Ratio of 12.12. Its Beta is 1.1 while RSP’s Alpha is -2.45. Furthermore, the fund has a Standard Deviation of 15.36 and a Sharpe Ratio of 0.89.
The ProShares UltraPro QQQ (TQQQ) has a R-squared of 83.64 with a Beta of 3.37 and a Sharpe Ratio of 1.1. Its Alpha is 7.29 while TQQQ’s Treynor Ratio is 15.65. Furthermore, the fund has a Standard Deviation of 50.08 and a Mean Return of 4.65.
RSP’s Mean Return is 3.46 points lower than that of TQQQ and its R-squared is 10.83 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than TQQQ. The Alpha and Beta of RSP are 9.74 points lower and 2.27 points lower than TQQQ’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 TQQQ, returning 139.98% on an annual basis. The poorest year for TQQQ in the last ten years was 2018, with a yield of -19.65%. Most years the ProShares UltraPro QQQ has given investors modest returns, such as in 2015, 2012, and 2014, when gains were 17.41%, 51.95%, and 56.82% 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 TQQQ, the end total would have been $593,012. This equates to a $583,012 profit over 10 years and a compound annual growth rate (CAGR) of 61.22%.
RSP’s CAGR is 47.43 percentage points lower than that of TQQQ and as a result, would have yielded $561,137 less on a $10,000 investment. Thus, RSP performed worse than TQQQ by 47.43% annually.
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