Skip to content

RSP vs. XLC: What’s The Difference?

The Invesco S&P 500 Equal Weight ETF (RSP) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between RSP and XLC? And which fund is better?

The expense ratio of RSP is 0.08 percentage points higher than XLC’s (0.2% vs. 0.12%). RSP also has a higher exposure to the technology sector and a higher standard deviation. Overall, RSP has provided lower returns than XLC over the past ten years.

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

Summary

RSPXLC
NameInvesco S&P 500 Equal Weight ETFCommunication Services Select Sector SPDR Fund
CategoryLarge BlendCommunications
IssuerInvescoSPDR State Street Global Advisors
AUM28.62B14.09B
Avg. Return13.79%29.04%
Div. Yield1.31%0.62%
Expense Ratio0.2%0.12%

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 Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.

RSP’s dividend yield is 0.69% higher than that of XLC (1.31% vs. 0.62%). Also, RSP yielded on average 15.25% less per year over the past decade (13.79% vs. 29.04%). The expense ratio of RSP is 0.08 percentage points higher than XLC’s (0.2% vs. 0.12%).

Fund Composition

Industry Exposure

RSP vs. XLC - Industry Exposure

RSPXLC
Technology14.73%0.0%
Industrials14.62%0.0%
Energy3.9%0.0%
Communication Services4.31%100.0%
Utilities5.58%0.0%
Healthcare13.69%0.0%
Consumer Defensive6.86%0.0%
Real Estate5.84%0.0%
Financial Services13.43%0.0%
Consumer Cyclical13.01%0.0%
Basic Materials4.04%0.0%

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 Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

XLC’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

RSP is 14.73% more exposed to the Technology sector than XLC (14.73% vs 0.0%). RSP’s exposure to Industrials and Healthcare stocks is 14.62% higher and 13.69% higher respectively (14.62% vs. 0.0% and 13.69% vs. 0.0%). In total, Basic Materials, Communication Services, and Utilities also make up 86.07% less of the fund’s holdings compared to XLC (13.93% vs. 100.00%).

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%.

XLC - Holdings

XLC HoldingsWeight
Facebook Inc A23.75%
Alphabet Inc A11.49%
Alphabet Inc Class C11.16%
Netflix Inc4.78%
Charter Communications Inc A4.65%
Comcast Corp Class A4.44%
T-Mobile US Inc4.41%
The Walt Disney Co4.39%
AT&T Inc4.35%
Verizon Communications Inc4.33%

XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.

Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.

Risk Analysis

RSPXLC
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 Mean Return of 1.19 with a Sharpe Ratio of 0.89 and a Beta of 1.1. Its Treynor Ratio is 12.12 while RSP’s Alpha is -2.45. Furthermore, the fund has a R-squared of 94.47 and a Standard Deviation of 15.36.

The Communication Services Select Sector SPDR Fund (XLC) has a Alpha of 0 with a Beta of 0 and a Mean Return of 0. Its Standard Deviation is 0 while XLC’s R-squared is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Treynor Ratio of 0.

RSP’s Mean Return is 1.19 points higher than that of XLC and its R-squared is 94.47 points higher. With a Standard Deviation of 15.36, RSP is slightly more volatile than XLC. The Alpha and Beta of RSP are 2.45 points lower and 1.10 points higher than XLC’s Alpha and Beta.

Performance

Annual Returns

RSP vs. XLC - Annual Returns

YearRSPXLC
202012.75%26.85%
201928.94%31.22%
2018-7.77%0.0%
201718.52%0.0%
201614.34%0.0%
2015-2.57%0.0%
201414.02%0.0%
201335.6%0.0%
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 2019 was the strongest year for XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

RSP vs. XLC - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
RSP$10,000$14,53713.79%
XLC$10,000$16,64529.04%

A $10,000 investment in RSP would have resulted in a final balance of $14,537. This is a profit of $4,537 over 2 years and amounts to a compound annual growth rate (CAGR) of 13.79%.

With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.

RSP’s CAGR is 15.25 percentage points lower than that of XLC and as a result, would have yielded $2,108 less on a $10,000 investment. Thus, RSP performed worse than XLC by 15.25% 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.

9125d72911bdc1f2dd2d1918a15aaf4c?s=250&d=mm&r=g

Leave a Reply

Your email address will not be published. Required fields are marked *