The Invesco S&P 500 Equal Weight ETF (RSP) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. RSP is a Invesco Large Blend fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between RSP and XLE? And which fund is better?
The expense ratio of RSP is 0.08 percentage points higher than XLE’s (0.2% vs. 0.12%). RSP also has a higher exposure to the technology sector and a lower standard deviation. Overall, RSP has provided higher returns than XLE over the past ten years.
In this article, we’ll compare RSP vs. XLE. We’ll look at industry exposure and fund composition, as well as at their annual returns and performance. Moreover, I’ll also discuss RSP’s and XLE’s portfolio growth, holdings, and risk metrics and examine how these affect their overall returns.
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Summary
| RSP | XLE | |
| Name | Invesco S&P 500 Equal Weight ETF | Energy Select Sector SPDR Fund |
| Category | Large Blend | Equity Energy |
| Issuer | Invesco | SPDR State Street Global Advisors |
| AUM | 28.62B | 25.55B |
| Avg. Return | 13.79% | 1.28% |
| Div. Yield | 1.31% | 3.92% |
| Expense Ratio | 0.2% | 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 Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.
RSP’s dividend yield is 2.61% lower than that of XLE (1.31% vs. 3.92%). Also, RSP yielded on average 12.51% more per year over the past decade (13.79% vs. 1.28%). The expense ratio of RSP is 0.08 percentage points higher than XLE’s (0.2% vs. 0.12%).
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Fund Composition
Industry Exposure
| RSP | XLE | |
| Technology | 14.73% | 0.0% |
| Industrials | 14.62% | 0.0% |
| Energy | 3.9% | 100.0% |
| Communication Services | 4.31% | 0.0% |
| Utilities | 5.58% | 0.0% |
| Healthcare | 13.69% | 0.0% |
| Consumer Defensive | 6.86% | 0.0% |
| Real Estate | 5.84% | 0.0% |
| Financial Services | 13.43% | 0.0% |
| Consumer Cyclical | 13.01% | 0.0% |
| Basic Materials | 4.04% | 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 Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy 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.
XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, 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 XLE (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 13.93% more of the fund’s holdings compared to XLE (13.93% vs. 0.00%).
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%.
| XLE Holdings | Weight |
| Exxon Mobil Corp | 23.7% |
| Chevron Corp | 20.03% |
| ConocoPhillips | 4.64% |
| EOG Resources Inc | 4.46% |
| Schlumberger Ltd | 4.43% |
| Marathon Petroleum Corp | 4.17% |
| Pioneer Natural Resources Co | 4.08% |
| Phillips 66 | 4.07% |
| Kinder Morgan Inc Class P | 3.85% |
| Williams Companies Inc | 3.5% |
XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.
Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.
Risk Analysis
| RSP | XLE | |
| Mean Return | 1.19 | 0.32 |
| R-squared | 94.47 | 61.84 |
| Std. Deviation | 15.36 | 27.52 |
| Alpha | -2.45 | -11.98 |
| Beta | 1.1 | 1.54 |
| Sharpe Ratio | 0.89 | 0.12 |
| Treynor Ratio | 12.12 | -0.4 |
The Invesco S&P 500 Equal Weight ETF (RSP) has a R-squared of 94.47 with a Treynor Ratio of 12.12 and a Mean Return of 1.19. Its Beta is 1.1 while RSP’s Standard Deviation is 15.36. Furthermore, the fund has a Alpha of -2.45 and a Sharpe Ratio of 0.89.
The Energy Select Sector SPDR Fund (XLE) has a Beta of 1.54 with a R-squared of 61.84 and a Mean Return of 0.32. Its Sharpe Ratio is 0.12 while XLE’s Standard Deviation is 27.52. Furthermore, the fund has a Treynor Ratio of -0.4 and a Alpha of -11.98.
RSP’s Mean Return is 0.87 points higher than that of XLE and its R-squared is 32.63 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than XLE. The Alpha and Beta of RSP are 9.53 points higher and 0.44 points lower than XLE’s Alpha and Beta.
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Performance
Annual Returns
| Year | RSP | XLE |
| 2020 | 12.75% | -32.56% |
| 2019 | 28.94% | 11.87% |
| 2018 | -7.77% | -18.1% |
| 2017 | 18.52% | -1.01% |
| 2016 | 14.34% | 27.95% |
| 2015 | -2.57% | -21.47% |
| 2014 | 14.02% | -8.61% |
| 2013 | 35.6% | 26.16% |
| 2012 | 17.04% | 5.17% |
| 2011 | -0.5% | 2.98% |
| 2010 | 21.3% | 21.7% |
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 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| RSP | $10,000 | $38,664 | 13.79% |
| XLE | $10,000 | $9,339 | 1.28% |
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 XLE, the end total would have been $9,339. This equates to a $-661 profit over 11 years and a compound annual growth rate (CAGR) of 1.28%.
RSP’s CAGR is 12.51 percentage points higher than that of XLE and as a result, would have yielded $29,325 more on a $10,000 investment. Thus, RSP outperformed XLE by 12.51% annually.
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