RSP vs. VXF: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between RSP and VXF? And which fund is better?

The expense ratio of RSP is 0.14 percentage points higher than VXF’s (0.2% vs. 0.06%). RSP also has a lower exposure to the technology sector and a lower standard deviation. Overall, RSP has provided lower returns than VXF over the past ten years.

In this article, we’ll compare RSP vs. VXF. We’ll look at industry exposure and annual returns, as well as at their holdings and performance. Moreover, I’ll also discuss RSP’s and VXF’s fund composition, portfolio growth, and risk metrics and examine how these affect their overall returns.

Summary

RSP VXF
Name Invesco S&P 500 Equal Weight ETF Vanguard Extended Market Index Fund ETF Shares
Category Large Blend Mid-Cap Growth
Issuer Invesco Vanguard
AUM 28.62B 114.53B
Avg. Return 13.79% 15.47%
Div. Yield 1.31% 1.19%
Expense Ratio 0.2% 0.06%

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 Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.

RSP’s dividend yield is 0.12% higher than that of VXF (1.31% vs. 1.19%). Also, RSP yielded on average 1.68% less per year over the past decade (13.79% vs. 15.47%). The expense ratio of RSP is 0.14 percentage points higher than VXF’s (0.2% vs. 0.06%).

Fund Composition

Industry Exposure

RSP vs. VXF - Industry Exposure

RSP VXF
Technology 14.73% 23.61%
Industrials 14.62% 11.31%
Energy 3.9% 2.46%
Communication Services 4.31% 7.29%
Utilities 5.58% 1.65%
Healthcare 13.69% 15.25%
Consumer Defensive 6.86% 3.09%
Real Estate 5.84% 8.16%
Financial Services 13.43% 12.56%
Consumer Cyclical 13.01% 11.35%
Basic Materials 4.04% 3.26%

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 Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.

VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.

RSP is 8.88% less exposed to the Technology sector than VXF (14.73% vs 23.61%). RSP’s exposure to Industrials and Healthcare stocks is 3.31% higher and 1.56% lower respectively (14.62% vs. 11.31% and 13.69% vs. 15.25%). In total, Basic Materials, Communication Services, and Utilities also make up 1.73% more of the fund’s holdings compared to VXF (13.93% vs. 12.20%).

Holdings

RSP - 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%.

VXF - Holdings

VXF Holdings Weight
Square Inc A 1.2%
Zoom Video Communications Inc 1.04%
Uber Technologies Inc 0.93%
Moderna Inc 0.9%
Blackstone Group Inc 0.83%
Snap Inc Class A 0.8%
Twilio Inc A 0.73%
DocuSign Inc 0.68%
CrowdStrike Holdings Inc Class A 0.63%
Marvell Technology Inc 0.6%

VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.

Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.

Risk Analysis

RSP VXF
Mean Return 1.19 1.24
R-squared 94.47 85.73
Std. Deviation 15.36 18.04
Alpha -2.45 -3.26
Beta 1.1 1.23
Sharpe Ratio 0.89 0.79
Treynor Ratio 12.12 10.92

The Invesco S&P 500 Equal Weight ETF (RSP) has a Mean Return of 1.19 with a Standard Deviation of 15.36 and a R-squared of 94.47. Its Treynor Ratio is 12.12 while RSP’s Sharpe Ratio is 0.89. Furthermore, the fund has a Alpha of -2.45 and a Beta of 1.1.

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Standard Deviation of 18.04 with a Beta of 1.23 and a R-squared of 85.73. Its Alpha is -3.26 while VXF’s Treynor Ratio is 10.92. Furthermore, the fund has a Mean Return of 1.24 and a Sharpe Ratio of 0.79.

RSP’s Mean Return is 0.05 points lower than that of VXF and its R-squared is 8.74 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than VXF. The Alpha and Beta of RSP are 0.81 points higher and 0.13 points lower than VXF’s Alpha and Beta.

Performance

Annual Returns

RSP vs. VXF - Annual Returns

Year RSP VXF
2020 12.75% 32.19%
2019 28.94% 28.04%
2018 -7.77% -9.37%
2017 18.52% 18.1%
2016 14.34% 16.16%
2015 -2.57% -3.26%
2014 14.02% 7.55%
2013 35.6% 38.37%
2012 17.04% 18.48%
2011 -0.5% -3.61%
2010 21.3% 27.55%

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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.

Portfolio Growth

RSP vs. VXF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
RSP $10,000 $38,664 13.79%
VXF $10,000 $44,130 15.47%

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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.

RSP’s CAGR is 1.68 percentage points lower than that of VXF and as a result, would have yielded $5,466 less on a $10,000 investment. Thus, RSP performed worse than VXF by 1.68% 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) 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!

2) 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!).

3) If you are interested in crypto, check out Gemini. I've started allocating a small amount of assets to the growing crypto space and Gemini has just been a breeze to use. Once you register, make sure to also open an Active Trader account to buy crypto at the lowest fees on the market (just 0.03%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply