The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Total World Stock Index Fund ETF Shares (VT) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VT is a Vanguard N/A fund. So, what’s the difference between RSP and VT? And which fund is better?
The expense ratio of RSP is 0.12 percentage points higher than VT’s (0.2% vs. 0.08%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided higher returns than VT over the past ten years.
In this article, we’ll compare RSP vs. VT. We’ll look at risk metrics and industry exposure, as well as at their portfolio growth and annual returns. Moreover, I’ll also discuss RSP’s and VT’s holdings, fund composition, and performance and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Vanguard Total World Stock Index Fund ETF Shares|
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 Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
RSP’s dividend yield is 0.34% lower than that of VT (1.31% vs. 1.65%). Also, RSP yielded on average 3.37% more per year over the past decade (13.79% vs. 10.42%). The expense ratio of RSP is 0.12 percentage points higher than VT’s (0.2% vs. 0.08%).
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 Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
RSP is 4.90% less exposed to the Technology sector than VT (14.73% vs 19.63%). RSP’s exposure to Industrials and Healthcare stocks is 3.92% higher and 2.11% higher respectively (14.62% vs. 10.7% and 13.69% vs. 11.58%). In total, Basic Materials, Communication Services, and Utilities also make up 2.66% less of the fund’s holdings compared to VT (13.93% vs. 16.59%).
|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%.
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Alpha of -2.45 with a Standard Deviation of 15.36 and a Beta of 1.1. Its Treynor Ratio is 12.12 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Mean Return of 1.19 and a R-squared of 94.47.
The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Beta of 1.01 with a R-squared of 99.35 and a Mean Return of 0.9. Its Sharpe Ratio is 0.71 while VT’s Treynor Ratio is 9.5. Furthermore, the fund has a Alpha of 0.2 and a Standard Deviation of 14.19.
RSP’s Mean Return is 0.29 points higher than that of VT and its R-squared is 4.88 points lower. With a Standard Deviation of 15.36, RSP is slightly more volatile than VT. The Alpha and Beta of RSP are 2.65 points lower and 0.09 points higher than VT’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 2019 was the strongest year for VT, returning 26.8% on an annual basis. The poorest year for VT in the last ten years was 2018, with a yield of -9.67%. Most years the Vanguard Total World Stock Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were 8.77%, 13.05%, and 16.74% 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 VT, the end total would have been $27,739. This equates to a $17,739 profit over 11 years and a compound annual growth rate (CAGR) of 10.42%.
RSP’s CAGR is 3.37 percentage points higher than that of VT and as a result, would have yielded $10,925 more on a $10,000 investment. Thus, RSP outperformed VT by 3.37% annually.
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