The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Large-Cap Index Fund ETF Shares (VV) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VV is a Vanguard Large Blend fund. So, what’s the difference between RSP and VV? And which fund is better?
The expense ratio of RSP is 0.16 percentage points higher than VV’s (0.2% vs. 0.04%). RSP also has a lower exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than VV over the past ten years.
In this article, we’ll compare RSP vs. VV. We’ll look at risk metrics and performance, as well as at their industry exposure and fund composition. Moreover, I’ll also discuss RSP’s and VV’s portfolio growth, annual returns, and holdings and examine how these affect their overall returns.
|Name||Invesco S&P 500 Equal Weight ETF||Vanguard Large-Cap Index Fund ETF Shares|
|Category||Large Blend||Large Blend|
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 Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% with an expense ratio of 0.04%.
RSP’s dividend yield is 0.05% higher than that of VV (1.31% vs. 1.26%). Also, RSP yielded on average 0.96% less per year over the past decade (13.79% vs. 14.75%). The expense ratio of RSP is 0.16 percentage points higher than VV’s (0.2% vs. 0.04%).
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 Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.
VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.
RSP is 10.65% less exposed to the Technology sector than VV (14.73% vs 25.38%). RSP’s exposure to Industrials and Healthcare stocks is 6.23% higher and 0.47% higher respectively (14.62% vs. 8.39% and 13.69% vs. 13.22%). In total, Basic Materials, Communication Services, and Utilities also make up 2.23% less of the fund’s holdings compared to VV (13.93% vs. 16.16%).
|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||2.19%|
|Alphabet Inc Class A||1.93%|
|Alphabet Inc Class C||1.81%|
|Berkshire Hathaway Inc Class B||1.3%|
|JPMorgan Chase & Co||1.24%|
VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.
Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Alpha of -2.45 with a Sharpe Ratio of 0.89 and a Mean Return of 1.19. Its Standard Deviation is 15.36 while RSP’s R-squared is 94.47. Furthermore, the fund has a Beta of 1.1 and a Treynor Ratio of 12.12.
The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Sharpe Ratio of 1.04 with a Standard Deviation of 13.75 and a Beta of 1.01. Its Alpha is -0.08 while VV’s R-squared is 99.86. Furthermore, the fund has a Mean Return of 1.24 and a Treynor Ratio of 14.14.
RSP’s Mean Return is 0.05 points lower than that of VV and its R-squared is 5.39 points lower. With a Standard Deviation of 15.36, RSP is slightly more volatile than VV. The Alpha and Beta of RSP are 2.37 points lower and 0.09 points higher than VV’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 2013 was the strongest year for VV, returning 32.65% on an annual basis. The poorest year for VV in the last ten years was 2018, with a yield of -4.44%. Most years the Vanguard Large-Cap Index Fund ETF Shares has given investors modest returns, such as in 2014, 2010, and 2012, when gains were 13.39%, 15.81%, and 16.09% 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 VV, the end total would have been $42,970. This equates to a $32,970 profit over 11 years and a compound annual growth rate (CAGR) of 14.75%.
RSP’s CAGR is 0.96 percentage points lower than that of VV and as a result, would have yielded $4,306 less on a $10,000 investment. Thus, RSP performed worse than VV by 0.96% annually.
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