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RSP vs. VTIP: What’s The Difference?

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.

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Summary

RSPVTIP
NameInvesco S&P 500 Equal Weight ETFVanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares
CategoryLarge BlendInflation-Protected Bond
IssuerInvescoVanguard
AUM28.62B50.67B
Avg. Return13.79%1.79%
Div. Yield1.31%1.35%
Expense Ratio0.2%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%).

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Fund Composition

Holdings

RSP - Holdings

RSP HoldingsWeight
Chipotle Mexican Grill Inc0.27%
Nike Inc Class B0.25%
MSCI Inc0.25%
Monolithic Power Systems Inc0.25%
Enphase Energy Inc0.25%
Advanced Micro Devices Inc0.25%
ResMed Inc0.24%
PerkinElmer Inc0.24%
IDEXX Laboratories Inc0.24%
Danaher Corp0.24%

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 - Holdings

VTIP Bond SectorsWeight
AAA99.87%
Others0.13%
Below B0.0%
B0.0%
BB0.0%
BBB0.0%
A0.0%
AA0.0%
US Government0.0%

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.

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Risk Analysis

RSPVTIP
Mean Return1.190
R-squared94.470
Std. Deviation15.360
Alpha-2.450
Beta1.10
Sharpe Ratio0.890
Treynor Ratio12.120

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.

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Performance

Annual Returns

RSP vs. VTIP - Annual Returns

YearRSPVTIP
202012.75%4.97%
201928.94%4.83%
2018-7.77%0.54%
201718.52%0.82%
201614.34%2.71%
2015-2.57%-0.15%
201414.02%-1.17%
201335.6%-1.55%
201217.04%0.0%
2011-0.5%0.0%
201021.3%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

RSP vs. VTIP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
RSP$10,000$20,18513.79%
VTIP$10,000$11,3051.79%

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.


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