The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Small-Cap Value Index Fund ETF Shares (VBR) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VBR is a Vanguard Small Value fund. So, what’s the difference between RSP and VBR? And which fund is better?
The expense ratio of RSP is 0.13 percentage points higher than VBR’s (0.2% vs. 0.07%). RSP also has a higher exposure to the technology sector and a lower standard deviation. Overall, RSP has provided higher returns than VBR over the past ten years.
In this article, we’ll compare RSP vs. VBR. We’ll look at risk metrics and industry exposure, as well as at their holdings and performance. Moreover, I’ll also discuss RSP’s and VBR’s fund composition, annual returns, and portfolio growth and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Vanguard Small-Cap Value Index Fund ETF Shares|
|Category||Large Blend||Small Value|
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 Value Index Fund ETF Shares (VBR) is a Small Value fund that is issued by Vanguard. It currently has 48.08B total assets under management and has yielded an average annual return of 12.28% over the past 10 years. The fund has a dividend yield of 1.6% with an expense ratio of 0.07%.
RSP’s dividend yield is 0.29% lower than that of VBR (1.31% vs. 1.6%). Also, RSP yielded on average 1.51% more per year over the past decade (13.79% vs. 12.28%). The expense ratio of RSP is 0.13 percentage points higher than VBR’s (0.2% vs. 0.07%).
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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 Value Index Fund ETF Shares (VBR) has the most exposure to the Financial Services sector at 20.04%. This is followed by Industrials and Consumer Cyclical at 18.44% and 13.82% respectively. Utilities (3.65%), Consumer Defensive (4.36%), and Energy (5.15%) only make up 13.16% of the fund’s total assets.
VBR’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Technology, Real Estate, and Consumer Cyclical stocks at 6.31%, 7.16%, 8.39%, 10.92%, and 13.82%.
RSP is 6.34% more exposed to the Technology sector than VBR (14.73% vs 8.39%). RSP’s exposure to Industrials and Healthcare stocks is 3.82% lower and 6.53% higher respectively (14.62% vs. 18.44% and 13.69% vs. 7.16%). In total, Basic Materials, Communication Services, and Utilities also make up 2.20% more of the fund’s holdings compared to VBR (13.93% vs. 11.73%).
|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%.
|Diamondback Energy Inc||0.55%|
|VICI Properties Inc Ordinary Shares||0.54%|
|Nuance Communications Inc||0.5%|
|Molina Healthcare Inc||0.48%|
|Howmet Aerospace Inc||0.44%|
|Apollo Global Management Inc Class A||0.42%|
|Brown & Brown Inc||0.41%|
VBR’s Top Holdings are Diamondback Energy Inc, VICI Properties Inc Ordinary Shares, IDEX Corp, Nuance Communications Inc, and Molina Healthcare Inc at 0.55%, 0.54%, 0.54%, 0.5%, and 0.48%.
Signature Bank (0.46%), Novavax Inc (0.44%), and Howmet Aerospace Inc (0.44%) have a slightly smaller but still significant weight. Apollo Global Management Inc Class A and Brown & Brown Inc are also represented in the VBR’s holdings at 0.42% and 0.41%.
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The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Alpha of -2.45 and a Beta of 1.1. Its Mean Return is 1.19 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a R-squared of 94.47 and a Treynor Ratio of 12.12.
The Vanguard Small-Cap Value Index Fund ETF Shares (VBR) has a Mean Return of 1.08 with a R-squared of 82.2 and a Standard Deviation of 18.37. Its Beta is 1.23 while VBR’s Treynor Ratio is 9.15. Furthermore, the fund has a Alpha of -5.09 and a Sharpe Ratio of 0.67.
RSP’s Mean Return is 0.11 points higher than that of VBR and its R-squared is 12.27 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than VBR. The Alpha and Beta of RSP are 2.64 points higher and 0.13 points lower than VBR’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 2013 was the strongest year for VBR, returning 36.57% on an annual basis. The poorest year for VBR in the last ten years was 2018, with a yield of -12.22%. Most years the Vanguard Small-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2017, and 2012, when gains were 10.55%, 11.79%, and 18.78% 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 VBR, the end total would have been $32,611. This equates to a $22,611 profit over 11 years and a compound annual growth rate (CAGR) of 12.28%.
RSP’s CAGR is 1.51 percentage points higher than that of VBR and as a result, would have yielded $6,053 more on a $10,000 investment. Thus, RSP outperformed VBR by 1.51% annually.
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