Skip to content

RSP vs. XLI: What’s The Difference?

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

The expense ratio of RSP is 0.08 percentage points higher than XLI’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 lower returns than XLI over the past ten years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

RSPXLI
NameInvesco S&P 500 Equal Weight ETFIndustrial Select Sector SPDR Fund
CategoryLarge BlendIndustrials
IssuerInvescoSPDR State Street Global Advisors
AUM28.62B19.33B
Avg. Return13.79%14.44%
Div. Yield1.31%1.25%
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 Industrial Select Sector SPDR Fund (XLI) is a Industrials fund that is issued by SPDR State Street Global Advisors. It currently has 19.33B total assets under management and has yielded an average annual return of 14.44% over the past 10 years. The fund has a dividend yield of 1.25% with an expense ratio of 0.12%.

RSP’s dividend yield is 0.06% higher than that of XLI (1.31% vs. 1.25%). Also, RSP yielded on average 0.65% less per year over the past decade (13.79% vs. 14.44%). The expense ratio of RSP is 0.08 percentage points higher than XLI’s (0.2% vs. 0.12%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

RSP vs. XLI - Industry Exposure

RSPXLI
Technology14.73%1.82%
Industrials14.62%97.49%
Energy3.9%0.0%
Communication Services4.31%0.0%
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%0.69%
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 Industrial Select Sector SPDR Fund (XLI) has the most exposure to the Industrials sector at 97.49%. This is followed by Technology and Consumer Cyclical at 1.82% and 0.69% respectively. Financial Services (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

XLI’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Consumer Cyclical stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.69%.

RSP is 12.91% more exposed to the Technology sector than XLI (14.73% vs 1.82%). RSP’s exposure to Industrials and Healthcare stocks is 82.87% lower and 13.69% higher respectively (14.62% vs. 97.49% 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 XLI (13.93% vs. 0.00%).

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%.

XLI - Holdings

XLI HoldingsWeight
Honeywell International Inc4.9%
United Parcel Service Inc Class B4.84%
Union Pacific Corp4.7%
Boeing Co4.24%
Raytheon Technologies Corp4.16%
Caterpillar Inc3.84%
General Electric Co3.8%
3M Co3.7%
Deere & Co3.54%
Lockheed Martin Corp2.98%

XLI’s Top Holdings are Honeywell International Inc, United Parcel Service Inc Class B, Union Pacific Corp, Boeing Co, and Raytheon Technologies Corp at 4.9%, 4.84%, 4.7%, 4.24%, and 4.16%.

Caterpillar Inc (3.84%), General Electric Co (3.8%), and 3M Co (3.7%) have a slightly smaller but still significant weight. Deere & Co and Lockheed Martin Corp are also represented in the XLI’s holdings at 3.54% and 2.98%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

RSPXLI
Mean Return1.191.14
R-squared94.4778.97
Std. Deviation15.3617.13
Alpha-2.452.38
Beta1.11.08
Sharpe Ratio0.890.76
Treynor Ratio12.1211.34

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

The Industrial Select Sector SPDR Fund (XLI) has a Beta of 1.08 with a Sharpe Ratio of 0.76 and a Treynor Ratio of 11.34. Its Standard Deviation is 17.13 while XLI’s R-squared is 78.97. Furthermore, the fund has a Alpha of 2.38 and a Mean Return of 1.14.

RSP’s Mean Return is 0.05 points higher than that of XLI and its R-squared is 15.50 points higher. With a Standard Deviation of 15.36, RSP is slightly less volatile than XLI. The Alpha and Beta of RSP are 4.83 points lower and 0.02 points higher than XLI’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

RSP vs. XLI - Annual Returns

YearRSPXLI
202012.75%11.0%
201928.94%29.11%
2018-7.77%-13.1%
201718.52%23.85%
201614.34%19.93%
2015-2.57%-4.27%
201414.02%10.44%
201335.6%40.44%
201217.04%14.86%
2011-0.5%-1.01%
201021.3%27.62%

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 XLI, returning 40.44% on an annual basis. The poorest year for XLI in the last ten years was 2018, with a yield of -13.1%. Most years the Industrial Select Sector SPDR Fund has given investors modest returns, such as in 2020, 2012, and 2016, when gains were 11.0%, 14.86%, and 19.93% respectively.

Portfolio Growth

RSP vs. XLI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
RSP$10,000$38,66413.79%
XLI$10,000$39,85314.44%

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 XLI, the end total would have been $39,853. This equates to a $29,853 profit over 11 years and a compound annual growth rate (CAGR) of 14.44%.

RSP’s CAGR is 0.65 percentage points lower than that of XLI and as a result, would have yielded $1,189 less on a $10,000 investment. Thus, RSP performed worse than XLI by 0.65% 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.

Leave a Reply

Your email address will not be published.