The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VBK is a Vanguard Small Growth fund. So, what’s the difference between RSP and VBK? And which fund is better?
The expense ratio of RSP is 0.13 percentage points higher than VBK’s (0.2% vs. 0.07%). RSP also has a lower exposure to the technology sector and a lower standard deviation. Overall, RSP has provided lower returns than VBK over the past ten years.
In this article, we’ll compare RSP vs. VBK. We’ll look at annual returns and portfolio growth, as well as at their holdings and fund composition. Moreover, I’ll also discuss RSP’s and VBK’s industry exposure, performance, and risk metrics and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Vanguard Small-Cap Growth Index Fund ETF Shares|
|Category||Large Blend||Small Growth|
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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) is a Small Growth fund that is issued by Vanguard. It currently has 37.89B total assets under management and has yielded an average annual return of 16.53% over the past 10 years. The fund has a dividend yield of 0.45% with an expense ratio of 0.07%.
RSP’s dividend yield is 0.86% higher than that of VBK (1.31% vs. 0.45%). Also, RSP yielded on average 2.74% less per year over the past decade (13.79% vs. 16.53%). The expense ratio of RSP is 0.13 percentage points higher than VBK’s (0.2% vs. 0.07%).
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 Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has the most exposure to the Technology sector at 27.87%. This is followed by Healthcare and Industrials at 23.24% and 13.19% respectively. Energy (1.77%), Basic Materials (2.49%), and Communication Services (3.24%) only make up 7.50% of the fund’s total assets.
VBK’s mid-section with moderate exposure is comprised of Consumer Defensive, Financial Services, Real Estate, Consumer Cyclical, and Industrials stocks at 3.83%, 4.05%, 7.87%, 12.13%, and 13.19%.
RSP is 13.14% less exposed to the Technology sector than VBK (14.73% vs 27.87%). RSP’s exposure to Industrials and Healthcare stocks is 1.43% higher and 9.55% lower respectively (14.62% vs. 13.19% and 13.69% vs. 23.24%). In total, Basic Materials, Communication Services, and Utilities also make up 7.88% more of the fund’s holdings compared to VBK (13.93% vs. 6.05%).
|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%.
|Charles River Laboratories International Inc||0.78%|
|Fair Isaac Corp||0.57%|
|Bill.com Holdings Inc Ordinary Shares||0.56%|
VBK’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.78%, 0.73%, 0.73%, 0.73%, and 0.72%.
Entegris Inc (0.7%), PTC Inc (0.62%), and Fair Isaac Corp (0.57%) have a slightly smaller but still significant weight. Bill.com Holdings Inc Ordinary Shares and Avalara Inc are also represented in the VBK’s holdings at 0.56% and 0.55%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Sharpe Ratio of 0.89 with a Standard Deviation of 15.36 and a Alpha of -2.45. Its Beta is 1.1 while RSP’s Treynor Ratio is 12.12. Furthermore, the fund has a R-squared of 94.47 and a Mean Return of 1.19.
The Vanguard Small-Cap Growth Index Fund ETF Shares (VBK) has a Standard Deviation of 17.95 with a Beta of 1.18 and a R-squared of 80.56. Its Mean Return is 1.22 while VBK’s Alpha is -2.81. Furthermore, the fund has a Treynor Ratio of 11.18 and a Sharpe Ratio of 0.78.
RSP’s Mean Return is 0.03 points lower than that of VBK and its R-squared is 13.91 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than VBK. The Alpha and Beta of RSP are 0.36 points higher and 0.08 points lower than VBK’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 VBK, returning 38.18% on an annual basis. The poorest year for VBK in the last ten years was 2018, with a yield of -5.68%. Most years the Vanguard Small-Cap Growth Index Fund ETF Shares has given investors modest returns, such as in 2016, 2012, and 2017, when gains were 10.74%, 17.67%, and 21.9% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 VBK, the end total would have been $48,639. This equates to a $38,639 profit over 11 years and a compound annual growth rate (CAGR) of 16.53%.
RSP’s CAGR is 2.74 percentage points lower than that of VBK and as a result, would have yielded $9,975 less on a $10,000 investment. Thus, RSP performed worse than VBK by 2.74% annually.
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