The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Health Care Index Fund ETF Shares (VHT) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VHT is a Vanguard Health fund. So, what’s the difference between RSP and VHT? And which fund is better?
The expense ratio of RSP is 0.10 percentage points higher than VHT’s (0.2% vs. 0.1%). RSP also has a higher exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than VHT over the past ten years.
In this article, we’ll compare RSP vs. VHT. We’ll look at annual returns and risk metrics, as well as at their portfolio growth and performance. Moreover, I’ll also discuss RSP’s and VHT’s industry exposure, fund composition, and holdings and examine how these affect their overall returns.
Summary
| RSP | VHT | |
| Name | Invesco S&P 500 Equal Weight ETF | Vanguard Health Care Index Fund ETF Shares |
| Category | Large Blend | Health |
| Issuer | Invesco | Vanguard |
| AUM | 28.62B | 17.94B |
| Avg. Return | 13.79% | 16.04% |
| Div. Yield | 1.31% | 1.15% |
| Expense Ratio | 0.2% | 0.1% |
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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.
RSP’s dividend yield is 0.16% higher than that of VHT (1.31% vs. 1.15%). Also, RSP yielded on average 2.25% less per year over the past decade (13.79% vs. 16.04%). The expense ratio of RSP is 0.10 percentage points higher than VHT’s (0.2% vs. 0.1%).
Fund Composition
Industry Exposure
| RSP | VHT | |
| Technology | 14.73% | 0.05% |
| Industrials | 14.62% | 0.05% |
| Energy | 3.9% | 0.0% |
| Communication Services | 4.31% | 0.0% |
| Utilities | 5.58% | 0.0% |
| Healthcare | 13.69% | 99.57% |
| Consumer Defensive | 6.86% | 0.0% |
| Real Estate | 5.84% | 0.0% |
| Financial Services | 13.43% | 0.02% |
| Consumer Cyclical | 13.01% | 0.0% |
| Basic Materials | 4.04% | 0.31% |
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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.
VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.
RSP is 14.68% more exposed to the Technology sector than VHT (14.73% vs 0.05%). RSP’s exposure to Industrials and Healthcare stocks is 14.57% higher and 85.88% lower respectively (14.62% vs. 0.05% and 13.69% vs. 99.57%). In total, Basic Materials, Communication Services, and Utilities also make up 13.62% more of the fund’s holdings compared to VHT (13.93% vs. 0.31%).
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%.
| VHT Holdings | Weight |
| Johnson & Johnson | 7.34% |
| UnitedHealth Group Inc | 6.44% |
| Pfizer Inc | 3.7% |
| Abbott Laboratories | 3.48% |
| Thermo Fisher Scientific Inc | 3.37% |
| AbbVie Inc | 3.37% |
| Merck & Co Inc | 3.33% |
| Eli Lilly and Co | 3.17% |
| Danaher Corp | 2.91% |
| Medtronic PLC | 2.83% |
VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.
AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.
Risk Analysis
| RSP | VHT | |
| Mean Return | 1.19 | 1.33 |
| R-squared | 94.47 | 59.86 |
| Std. Deviation | 15.36 | 13.58 |
| Alpha | -2.45 | 7.99 |
| Beta | 1.1 | 0.75 |
| Sharpe Ratio | 0.89 | 1.13 |
| Treynor Ratio | 12.12 | 20.74 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Mean Return of 1.19 and a Treynor Ratio of 12.12. Its Beta is 1.1 while RSP’s R-squared is 94.47. Furthermore, the fund has a Alpha of -2.45 and a Sharpe Ratio of 0.89.
The Vanguard Health Care Index Fund ETF Shares (VHT) has a Treynor Ratio of 20.74 with a R-squared of 59.86 and a Alpha of 7.99. Its Standard Deviation is 13.58 while VHT’s Mean Return is 1.33. Furthermore, the fund has a Beta of 0.75 and a Sharpe Ratio of 1.13.
RSP’s Mean Return is 0.14 points lower than that of VHT and its R-squared is 34.61 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than VHT. The Alpha and Beta of RSP are 10.44 points lower and 0.35 points higher than VHT’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | VHT |
| 2020 | 12.75% | 18.21% |
| 2019 | 28.94% | 21.97% |
| 2018 | -7.77% | 5.55% |
| 2017 | 18.52% | 23.34% |
| 2016 | 14.34% | -3.33% |
| 2015 | -2.57% | 7.22% |
| 2014 | 14.02% | 25.38% |
| 2013 | 35.6% | 42.67% |
| 2012 | 17.04% | 19.1% |
| 2011 | -0.5% | 10.57% |
| 2010 | 21.3% | 5.75% |
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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| VHT | $10,000 | $48,464 | 16.04% |
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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.
RSP’s CAGR is 2.25 percentage points lower than that of VHT and as a result, would have yielded $9,800 less on a $10,000 investment. Thus, RSP performed worse than VHT by 2.25% annually.
Current recommendations:
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.
I believe that money is just a means to an end: to be free to spend your time as you wish, to maximize your positive impact on the world.
