RSP vs. USMV: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the iShares MSCI USA Min Vol Factor ETF (USMV) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and USMV is a iShares Large Blend fund. So, what’s the difference between RSP and USMV? And which fund is better?

The expense ratio of RSP is 0.05 percentage points higher than USMV’s (0.2% vs. 0.15%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than USMV over the past ten years.

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

Summary

RSP USMV
Name Invesco S&P 500 Equal Weight ETF iShares MSCI USA Min Vol Factor ETF
Category Large Blend Large Blend
Issuer Invesco iShares
AUM 28.62B 27.6B
Avg. Return 13.79% 13.89%
Div. Yield 1.31% 1.5%
Expense Ratio 0.2% 0.15%

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 iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 0.15%.

RSP’s dividend yield is 0.19% lower than that of USMV (1.31% vs. 1.5%). Also, RSP yielded on average 0.11% less per year over the past decade (13.79% vs. 13.89%). The expense ratio of RSP is 0.05 percentage points higher than USMV’s (0.2% vs. 0.15%).

Fund Composition

Industry Exposure

RSP vs. USMV - Industry Exposure

RSP USMV
Technology 14.73% 20.53%
Industrials 14.62% 10.51%
Energy 3.9% 0.21%
Communication Services 4.31% 11.03%
Utilities 5.58% 6.93%
Healthcare 13.69% 18.42%
Consumer Defensive 6.86% 12.82%
Real Estate 5.84% 2.73%
Financial Services 13.43% 9.65%
Consumer Cyclical 13.01% 5.53%
Basic Materials 4.04% 1.65%

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 iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

RSP is 5.80% less exposed to the Technology sector than USMV (14.73% vs 20.53%). RSP’s exposure to Industrials and Healthcare stocks is 4.11% higher and 4.73% lower respectively (14.62% vs. 10.51% and 13.69% vs. 18.42%). In total, Basic Materials, Communication Services, and Utilities also make up 5.68% less of the fund’s holdings compared to USMV (13.93% vs. 19.61%).

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%.

USMV - Holdings

USMV Holdings Weight
Eli Lilly and Co 1.64%
Microsoft Corp 1.62%
T-Mobile US Inc 1.51%
Accenture PLC Class A 1.51%
Visa Inc Class A 1.49%
Waste Management Inc 1.45%
Adobe Inc 1.45%
The Kroger Co 1.44%
Johnson & Johnson 1.42%
Gilead Sciences Inc 1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

Risk Analysis

RSP USMV
Mean Return 1.19 0
R-squared 94.47 0
Std. Deviation 15.36 0
Alpha -2.45 0
Beta 1.1 0
Sharpe Ratio 0.89 0
Treynor Ratio 12.12 0

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

The iShares MSCI USA Min Vol Factor ETF (USMV) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Treynor Ratio of 0. Its Beta is 0 while USMV’s Alpha is 0. Furthermore, the fund has a Mean Return of 0 and a R-squared of 0.

RSP’s Mean Return is 1.19 points higher than that of USMV and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than USMV. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than USMV’s Alpha and Beta.

Performance

Annual Returns

RSP vs. USMV - Annual Returns

Year RSP USMV
2020 12.75% 5.6%
2019 28.94% 27.77%
2018 -7.77% 1.36%
2017 18.52% 18.97%
2016 14.34% 10.5%
2015 -2.57% 5.5%
2014 14.02% 16.34%
2013 35.6% 25.11%
2012 17.04% 11.04%
2011 -0.5% 0.0%
2010 21.3% 0.0%

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 2019 was the strongest year for USMV, returning 27.77% on an annual basis. The poorest year for USMV in the last ten years was 2011, with a yield of 0.0%. Most years the iShares MSCI USA Min Vol Factor ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 5.6%, 10.5%, and 11.04% respectively.

Portfolio Growth

RSP vs. USMV - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $27,371 13.79%
USMV $10,000 $27,607 13.89%

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 USMV, the end total would have been $27,607. This equates to a $17,607 profit over 8 years and a compound annual growth rate (CAGR) of 13.89%.

RSP’s CAGR is 0.11 percentage points lower than that of USMV and as a result, would have yielded $236 less on a $10,000 investment. Thus, RSP performed worse than USMV by 0.11% annually.


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