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.

Summary

RSP XLI
Name Invesco S&P 500 Equal Weight ETF Industrial Select Sector SPDR Fund
Category Large Blend Industrials
Issuer Invesco SPDR State Street Global Advisors
AUM 28.62B 19.33B
Avg. Return 13.79% 14.44%
Div. Yield 1.31% 1.25%
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 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%).

Fund Composition

Industry Exposure

RSP vs. XLI - Industry Exposure

RSP XLI
Technology 14.73% 1.82%
Industrials 14.62% 97.49%
Energy 3.9% 0.0%
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% 0.69%
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 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 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%.

XLI - Holdings

XLI Holdings Weight
Honeywell International Inc 4.9%
United Parcel Service Inc Class B 4.84%
Union Pacific Corp 4.7%
Boeing Co 4.24%
Raytheon Technologies Corp 4.16%
Caterpillar Inc 3.84%
General Electric Co 3.8%
3M Co 3.7%
Deere & Co 3.54%
Lockheed Martin Corp 2.98%

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%.

Risk Analysis

RSP XLI
Mean Return 1.19 1.14
R-squared 94.47 78.97
Std. Deviation 15.36 17.13
Alpha -2.45 2.38
Beta 1.1 1.08
Sharpe Ratio 0.89 0.76
Treynor Ratio 12.12 11.34

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.

Performance

Annual Returns

RSP vs. XLI - Annual Returns

Year RSP XLI
2020 12.75% 11.0%
2019 28.94% 29.11%
2018 -7.77% -13.1%
2017 18.52% 23.85%
2016 14.34% 19.93%
2015 -2.57% -4.27%
2014 14.02% 10.44%
2013 35.6% 40.44%
2012 17.04% 14.86%
2011 -0.5% -1.01%
2010 21.3% 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

Fund Initial Balance Final Balance CAGR
RSP $10,000 $38,664 13.79%
XLI $10,000 $39,853 14.44%

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.


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