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.
|Name||Invesco S&P 500 Equal Weight ETF||Vanguard Extended Market Index Fund ETF Shares|
|Category||Large Blend||Mid-Cap Growth|
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%).
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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%).
|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%.
|Square Inc A||1.2%|
|Zoom Video Communications Inc||1.04%|
|Uber Technologies Inc||0.93%|
|Blackstone Group Inc||0.83%|
|Snap Inc Class A||0.8%|
|Twilio Inc A||0.73%|
|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%.
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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.
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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.
|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 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.
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