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VB vs. RSP: What’s The Difference?

The Vanguard Small-Cap Index Fund ETF Shares (VB) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. VB is a Vanguard Small Blend fund and RSP is a Invesco Large Blend fund. So, what’s the difference between VB and RSP? And which fund is better?

The expense ratio of VB is 0.15 percentage points lower than RSP’s (0.05% vs. 0.2%). VB also has a higher exposure to the technology sector and a higher standard deviation. Overall, VB has provided higher returns than RSP over the past ten years.

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

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Summary

VBRSP
NameVanguard Small-Cap Index Fund ETF SharesInvesco S&P 500 Equal Weight ETF
CategorySmall BlendLarge Blend
IssuerVanguardInvesco
AUM137.72B28.62B
Avg. Return14.25%13.79%
Div. Yield1.14%1.31%
Expense Ratio0.05%0.2%

The Vanguard Small-Cap Index Fund ETF Shares (VB) is a Small Blend fund that is issued by Vanguard. It currently has 137.72B total assets under management and has yielded an average annual return of 14.25% over the past 10 years. The fund has a dividend yield of 1.14% with an expense ratio of 0.05%.

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%.

VB’s dividend yield is 0.17% lower than that of RSP (1.14% vs. 1.31%). Also, VB yielded on average 0.47% more per year over the past decade (14.25% vs. 13.79%). The expense ratio of VB is 0.15 percentage points lower than RSP’s (0.05% vs. 0.2%).

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Fund Composition

Industry Exposure

VB vs. RSP - Industry Exposure

VBRSP
Technology16.85%14.73%
Industrials16.11%14.62%
Energy3.67%3.9%
Communication Services2.4%4.31%
Utilities2.19%5.58%
Healthcare14.34%13.69%
Consumer Defensive4.14%6.86%
Real Estate9.56%5.84%
Financial Services13.06%13.43%
Consumer Cyclical13.03%13.01%
Basic Materials4.63%4.04%

The Vanguard Small-Cap Index Fund ETF Shares (VB) has the most exposure to the Technology sector at 16.85%. This is followed by Industrials and Healthcare at 16.11% and 14.34% respectively. Communication Services (2.4%), Energy (3.67%), and Consumer Defensive (4.14%) only make up 10.21% of the fund’s total assets.

VB’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Healthcare stocks at 4.63%, 9.56%, 13.03%, 13.06%, and 14.34%.

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%.

VB is 2.12% more exposed to the Technology sector than RSP (16.85% vs 14.73%). VB’s exposure to Industrials and Healthcare stocks is 1.49% higher and 0.65% higher respectively (16.11% vs. 14.62% and 14.34% vs. 13.69%). In total, Communication Services, Energy, and Consumer Defensive also make up 4.86% less of the fund’s holdings compared to RSP (10.21% vs. 15.07%).

Holdings

VB - Holdings

VB HoldingsWeight
Charles River Laboratories International Inc0.34%
Pool Corp0.32%
Bio-Techne Corp0.32%
Avantor Inc0.32%
PerkinElmer Inc0.31%
Diamondback Energy Inc0.31%
VICI Properties Inc Ordinary Shares0.3%
IDEX Corp0.3%
Entegris Inc0.3%
Novavax Inc0.29%

VB’s Top Holdings are Charles River Laboratories International Inc, Pool Corp, Bio-Techne Corp, Avantor Inc, and PerkinElmer Inc at 0.34%, 0.32%, 0.32%, 0.32%, and 0.31%.

Diamondback Energy Inc (0.31%), VICI Properties Inc Ordinary Shares (0.3%), and IDEX Corp (0.3%) have a slightly smaller but still significant weight. Entegris Inc and Novavax Inc are also represented in the VB’s holdings at 0.3% and 0.29%.

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%.

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Risk Analysis

VBRSP
Mean Return1.151.19
R-squared85.0394.47
Std. Deviation17.8215.36
Alpha-4.02-2.45
Beta1.211.1
Sharpe Ratio0.740.89
Treynor Ratio10.1512.12

The Vanguard Small-Cap Index Fund ETF Shares (VB) has a Mean Return of 1.15 with a Standard Deviation of 17.82 and a R-squared of 85.03. Its Beta is 1.21 while VB’s Alpha is -4.02. Furthermore, the fund has a Sharpe Ratio of 0.74 and a Treynor Ratio of 10.15.

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

VB’s Mean Return is 0.04 points lower than that of RSP and its R-squared is 9.44 points lower. With a Standard Deviation of 17.82, VB is slightly more volatile than RSP. The Alpha and Beta of VB are 1.57 points lower and 0.11 points higher than RSP’s Alpha and Beta.

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Performance

Annual Returns

VB vs. RSP - Annual Returns

YearVBRSP
202019.08%12.75%
201927.37%28.94%
2018-9.3%-7.77%
201716.24%18.52%
201618.31%14.34%
2015-3.65%-2.57%
20147.51%14.02%
201337.8%35.6%
201218.22%17.04%
2011-2.68%-0.5%
201027.89%21.3%

VB had its best year in 2013 with an annual return of 37.8%. VB’s worst year over the past decade yielded -9.3% and occurred in 2018. In most years the Vanguard Small-Cap Index Fund ETF Shares provided moderate returns such as in 2017, 2012, and 2016 where annual returns amounted to 16.24%, 18.22%, and 18.31% respectively.

The year 2013 was the strongest year for RSP, returning 35.6% on an annual basis. The poorest year for RSP in the last ten years was 2018, with a yield of -7.77%. Most years the Invesco S&P 500 Equal Weight ETF has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 14.02%, 14.34%, and 17.04% respectively.

Portfolio Growth

VB vs. RSP - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VB$10,000$39,73414.25%
RSP$10,000$38,66413.79%

A $10,000 investment in VB would have resulted in a final balance of $39,734. This is a profit of $29,734 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.25%.

With a $10,000 investment in RSP, the end total would have been $38,664. This equates to a $28,664 profit over 11 years and a compound annual growth rate (CAGR) of 13.79%.

VB’s CAGR is 0.47 percentage points higher than that of RSP and as a result, would have yielded $1,070 more on a $10,000 investment. Thus, VB outperformed RSP by 0.47% annually.


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