The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VTIP is a Vanguard Inflation-Protected Bond fund. So, what’s the difference between RSP and VTIP? And which fund is better?
The expense ratio of RSP is 0.15 percentage points higher than VTIP’s (0.2% vs. 0.05%). RSP also has a high exposure to the technology sector while VTIP is mostly comprised of AAA bonds. Overall, RSP has provided higher returns than VTIP over the past ten years.
In this article, we’ll compare RSP vs. VTIP. We’ll look at risk metrics and performance, as well as at their holdings and portfolio growth. Moreover, I’ll also discuss RSP’s and VTIP’s annual returns, fund composition, and industry exposure and examine how these affect their overall returns.
Summary
| RSP | VTIP | |
| Name | Invesco S&P 500 Equal Weight ETF | Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares |
| Category | Large Blend | Inflation-Protected Bond |
| Issuer | Invesco | Vanguard |
| AUM | 28.62B | 50.67B |
| Avg. Return | 13.79% | 1.79% |
| Div. Yield | 1.31% | 1.35% |
| Expense Ratio | 0.2% | 0.05% |
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 Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) is a Inflation-Protected Bond fund that is issued by Vanguard. It currently has 50.67B total assets under management and has yielded an average annual return of 1.79% over the past 10 years. The fund has a dividend yield of 1.35% with an expense ratio of 0.05%.
RSP’s dividend yield is 0.04% lower than that of VTIP (1.31% vs. 1.35%). Also, RSP yielded on average 12.00% more per year over the past decade (13.79% vs. 1.79%). The expense ratio of RSP is 0.15 percentage points higher than VTIP’s (0.2% vs. 0.05%).
Fund Composition
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%.
| VTIP Bond Sectors | Weight |
| AAA | 99.87% |
| Others | 0.13% |
| Below B | 0.0% |
| B | 0.0% |
| BB | 0.0% |
| BBB | 0.0% |
| A | 0.0% |
| AA | 0.0% |
| US Government | 0.0% |
VTIP’s Top Bond Sectors are ratings of AAA, Others, Below B, B, and BB at 99.87%, 0.13%, 0.0%, 0.0%, and 0.0%. The fund is less weighted towards BBB (0.0%), A (0.0%), and AA (0.0%) rated bonds.
Risk Analysis
| RSP | VTIP | |
| Mean Return | 1.19 | 0 |
| R-squared | 94.47 | 0 |
| Std. Deviation | 15.36 | 0 |
| Alpha | -2.45 | 0 |
| Beta | 1.1 | 0 |
| Sharpe Ratio | 0.89 | 0 |
| Treynor Ratio | 12.12 | 0 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a R-squared of 94.47 with a Alpha of -2.45 and a Mean Return of 1.19. Its Beta is 1.1 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Treynor Ratio of 12.12 and a Standard Deviation of 15.36.
The Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares (VTIP) has a Beta of 0 with a Standard Deviation of 0 and a R-squared of 0. Its Treynor Ratio is 0 while VTIP’s Sharpe Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Mean Return of 0.
RSP’s Mean Return is 1.19 points higher than that of VTIP and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than VTIP. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than VTIP’s Alpha and Beta.
Performance
Annual Returns
| Year | RSP | VTIP |
| 2020 | 12.75% | 4.97% |
| 2019 | 28.94% | 4.83% |
| 2018 | -7.77% | 0.54% |
| 2017 | 18.52% | 0.82% |
| 2016 | 14.34% | 2.71% |
| 2015 | -2.57% | -0.15% |
| 2014 | 14.02% | -1.17% |
| 2013 | 35.6% | -1.55% |
| 2012 | 17.04% | 0.0% |
| 2011 | -0.5% | 0.0% |
| 2010 | 21.3% | 0.0% |
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 2020 was the strongest year for VTIP, returning 4.97% on an annual basis. The poorest year for VTIP in the last ten years was 2013, with a yield of -1.55%. Most years the Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares has given investors modest returns, such as in 2011, 2010, and 2018, when gains were 0.0%, 0.0%, and 0.54% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $20,185 | 13.79% |
| VTIP | $10,000 | $11,305 | 1.79% |
A $10,000 investment in RSP would have resulted in a final balance of $20,185. This is a profit of $10,185 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.79%.
With a $10,000 investment in VTIP, the end total would have been $11,305. This equates to a $1,305 profit over 7 years and a compound annual growth rate (CAGR) of 1.79%.
RSP’s CAGR is 12.00 percentage points higher than that of VTIP and as a result, would have yielded $8,880 more on a $10,000 investment. Thus, RSP outperformed VTIP by 12.00% 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.
