VIG vs. RSP: What’s The Difference?

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

The expense ratio of VIG is 0.14 percentage points lower than RSP’s (0.06% vs. 0.2%). VIG also has a higher exposure to the industrials sector and a lower standard deviation. Overall, VIG has provided lower returns than RSP over the past ten years.

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

Summary

VIG RSP
Name Vanguard Dividend Appreciation Index Fund ETF Shares Invesco S&P 500 Equal Weight ETF
Category Large Blend Large Blend
Issuer Vanguard Invesco
AUM 71.92B 28.62B
Avg. Return 13.35% 13.79%
Div. Yield 1.56% 1.31%
Expense Ratio 0.06% 0.2%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

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%.

VIG’s dividend yield is 0.25% higher than that of RSP (1.56% vs. 1.31%). Also, VIG yielded on average 0.44% less per year over the past decade (13.35% vs. 13.79%). The expense ratio of VIG is 0.14 percentage points lower than RSP’s (0.06% vs. 0.2%).

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Fund Composition

Industry Exposure

VIG vs. RSP - Industry Exposure

VIG RSP
Technology 14.93% 14.73%
Industrials 17.23% 14.62%
Energy 0.0% 3.9%
Communication Services 2.86% 4.31%
Utilities 2.81% 5.58%
Healthcare 15.52% 13.69%
Consumer Defensive 15.32% 6.86%
Real Estate 0.0% 5.84%
Financial Services 17.18% 13.43%
Consumer Cyclical 10.47% 13.01%
Basic Materials 3.67% 4.04%

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.

VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.

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%.

VIG is 2.61% more exposed to the Industrials sector than RSP (17.23% vs 14.62%). VIG’s exposure to Financial Services and Healthcare stocks is 3.75% higher and 1.83% higher respectively (17.18% vs. 13.43% and 15.52% vs. 13.69%). In total, Energy, Utilities, and Communication Services also make up 8.12% less of the fund’s holdings compared to RSP (5.67% vs. 13.79%).

Holdings

VIG - Holdings

VIG Holdings Weight
Microsoft Corp 4.19%
JPMorgan Chase & Co 3.8%
Johnson & Johnson 3.67%
Walmart Inc 3.38%
Visa Inc Class A 3.22%
UnitedHealth Group Inc 3.22%
The Home Depot Inc 2.91%
Procter & Gamble Co 2.82%
Comcast Corp Class A 2.21%
Coca-Cola Co 1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

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%.

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Risk Analysis

VIG RSP
Mean Return 1.09 1.19
R-squared 92.2 94.47
Std. Deviation 12.25 15.36
Alpha 0.12 -2.45
Beta 0.86 1.1
Sharpe Ratio 1.01 0.89
Treynor Ratio 14.33 12.12

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Standard Deviation of 12.25 with a Mean Return of 1.09 and a Beta of 0.86. Its Alpha is 0.12 while VIG’s Treynor Ratio is 14.33. Furthermore, the fund has a R-squared of 92.2 and a Sharpe Ratio of 1.01.

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

VIG’s Mean Return is 0.10 points lower than that of RSP and its R-squared is 2.27 points lower. With a Standard Deviation of 12.25, VIG is slightly less volatile than RSP. The Alpha and Beta of VIG are 2.57 points higher and 0.24 points lower than RSP’s Alpha and Beta.

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Performance

Annual Returns

VIG vs. RSP - Annual Returns

Year VIG RSP
2020 15.46% 12.75%
2019 29.71% 28.94%
2018 -2.02% -7.77%
2017 22.22% 18.52%
2016 11.84% 14.34%
2015 -1.95% -2.57%
2014 10.06% 14.02%
2013 28.99% 35.6%
2012 11.61% 17.04%
2011 6.21% -0.5%
2010 14.67% 21.3%

VIG had its best year in 2019 with an annual return of 29.71%. VIG’s worst year over the past decade yielded -2.02% and occurred in 2018. In most years the Vanguard Dividend Appreciation Index Fund ETF Shares provided moderate returns such as in 2012, 2016, and 2010 where annual returns amounted to 11.61%, 11.84%, and 14.67% 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

VIG vs. RSP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VIG $10,000 $37,951 13.35%
RSP $10,000 $38,664 13.79%

A $10,000 investment in VIG would have resulted in a final balance of $37,951. This is a profit of $27,951 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

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%.

VIG’s CAGR is 0.44 percentage points lower than that of RSP and as a result, would have yielded $713 less on a $10,000 investment. Thus, VIG performed worse than RSP by 0.44% annually.


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