The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between RSP and VGK? And which fund is better?
The expense ratio of RSP is 0.12 percentage points higher than VGK’s (0.2% vs. 0.08%). RSP also has a higher exposure to the technology sector and a lower standard deviation. Overall, RSP has provided higher returns than VGK over the past ten years.
In this article, we’ll compare RSP vs. VGK. We’ll look at risk metrics and performance, as well as at their fund composition and annual returns. Moreover, I’ll also discuss RSP’s and VGK’s industry exposure, holdings, and portfolio growth and examine how these affect their overall returns.
Summary
| RSP | VGK | |
| Name | Invesco S&P 500 Equal Weight ETF | Vanguard FTSE Europe Index Fund ETF Shares |
| Category | Large Blend | Europe Stock |
| Issuer | Invesco | Vanguard |
| AUM | 28.62B | 25.7B |
| Avg. Return | 13.79% | 6.68% |
| Div. Yield | 1.31% | 2.52% |
| Expense Ratio | 0.2% | 0.08% |
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 FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.
RSP’s dividend yield is 1.21% lower than that of VGK (1.31% vs. 2.52%). Also, RSP yielded on average 7.11% more per year over the past decade (13.79% vs. 6.68%). The expense ratio of RSP is 0.12 percentage points higher than VGK’s (0.2% vs. 0.08%).
Fund Composition
Industry Exposure
| RSP | VGK | |
| Technology | 14.73% | 8.3% |
| Industrials | 14.62% | 15.58% |
| Energy | 3.9% | 4.3% |
| Communication Services | 4.31% | 5.09% |
| Utilities | 5.58% | 3.89% |
| Healthcare | 13.69% | 13.76% |
| Consumer Defensive | 6.86% | 11.39% |
| Real Estate | 5.84% | 2.57% |
| Financial Services | 13.43% | 15.85% |
| Consumer Cyclical | 13.01% | 11.6% |
| Basic Materials | 4.04% | 7.67% |
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 FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.
VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.
RSP is 6.43% more exposed to the Technology sector than VGK (14.73% vs 8.3%). RSP’s exposure to Industrials and Healthcare stocks is 0.96% lower and 0.07% lower respectively (14.62% vs. 15.58% and 13.69% vs. 13.76%). In total, Basic Materials, Communication Services, and Utilities also make up 2.72% less of the fund’s holdings compared to VGK (13.93% vs. 16.65%).
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%.
| VGK Holdings | Weight |
| Nestle SA | 2.82% |
| ASML Holding NV | 2.2% |
| Roche Holding AG | 2.13% |
| LVMH Moet Hennessy Louis Vuitton SE | 1.58% |
| Novartis AG | 1.55% |
| AstraZeneca PLC | 1.27% |
| SAP SE | 1.25% |
| Unilever PLC | 1.23% |
| Novo Nordisk A/S B | 1.09% |
| Siemens AG | 0.96% |
VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.
AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.
Risk Analysis
| RSP | VGK | |
| Mean Return | 1.19 | 0.61 |
| R-squared | 94.47 | 92.76 |
| Std. Deviation | 15.36 | 16.65 |
| Alpha | -2.45 | 0.45 |
| Beta | 1.1 | 1.06 |
| Sharpe Ratio | 0.89 | 0.4 |
| Treynor Ratio | 12.12 | 5.12 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a Sharpe Ratio of 0.89 with a Alpha of -2.45 and a Beta of 1.1. Its Treynor Ratio is 12.12 while RSP’s Mean Return is 1.19. Furthermore, the fund has a Standard Deviation of 15.36 and a R-squared of 94.47.
The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Beta of 1.06 with a Mean Return of 0.61 and a Standard Deviation of 16.65. Its Treynor Ratio is 5.12 while VGK’s Alpha is 0.45. Furthermore, the fund has a R-squared of 92.76 and a Sharpe Ratio of 0.4.
RSP’s Mean Return is 0.58 points higher than that of VGK and its R-squared is 1.71 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than VGK. The Alpha and Beta of RSP are 2.90 points lower and 0.04 points higher than VGK’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | VGK |
| 2020 | 12.75% | 6.5% |
| 2019 | 28.94% | 24.26% |
| 2018 | -7.77% | -14.79% |
| 2017 | 18.52% | 27.06% |
| 2016 | 14.34% | -0.59% |
| 2015 | -2.57% | -1.87% |
| 2014 | 14.02% | -6.56% |
| 2013 | 35.6% | 24.93% |
| 2012 | 17.04% | 21.01% |
| 2011 | -0.5% | -11.49% |
| 2010 | 21.3% | 5.01% |
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 2017 was the strongest year for VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| VGK | $10,000 | $18,350 | 6.68% |
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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.
RSP’s CAGR is 7.11 percentage points higher than that of VGK and as a result, would have yielded $20,314 more on a $10,000 investment. Thus, RSP outperformed VGK by 7.11% annually.
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