The Vanguard Mid-Cap Index Fund ETF Shares (VO) and the Invesco S&P 500 Equal Weight ETF (RSP) are both among the Top 100 ETFs. VO is a Vanguard Mid-Cap Blend fund and RSP is a Invesco Large Blend fund. So, what’s the difference between VO and RSP? And which fund is better?
The expense ratio of VO is 0.16 percentage points lower than RSP’s (0.04% vs. 0.2%). VO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VO has provided higher returns than RSP over the past ten years.
In this article, we’ll compare VO vs. RSP. We’ll look at fund composition and annual returns, as well as at their portfolio growth and risk metrics. Moreover, I’ll also discuss VO’s and RSP’s performance, industry exposure, and holdings and examine how these affect their overall returns.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||Invesco S&P 500 Equal Weight ETF|
|Category||Mid-Cap Blend||Large Blend|
The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.
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%.
VO’s dividend yield is 0.08% lower than that of RSP (1.23% vs. 1.31%). Also, VO yielded on average 0.55% more per year over the past decade (14.34% vs. 13.79%). The expense ratio of VO is 0.16 percentage points lower than RSP’s (0.04% vs. 0.2%).
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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.
VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.
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%.
VO is 7.28% more exposed to the Technology sector than RSP (22.01% vs 14.73%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 0.66% lower and 0.89% lower respectively (13.03% vs. 13.69% and 12.12% vs. 13.01%). In total, Basic Materials, Energy, and Utilities also make up 1.22% less of the fund’s holdings compared to RSP (12.30% vs. 13.52%).
|IDEXX Laboratories Inc||0.78%|
|Marvell Technology Inc||0.68%|
|IQVIA Holdings Inc||0.68%|
|Chipotle Mexican Grill Inc||0.63%|
|Veeva Systems Inc Class A||0.62%|
|Digital Realty Trust Inc||0.62%|
|Carrier Global Corp Ordinary Shares||0.61%|
VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.
Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.
|Chipotle Mexican Grill Inc||0.27%|
|Nike Inc Class B||0.25%|
|Monolithic Power Systems Inc||0.25%|
|Enphase Energy Inc||0.25%|
|Advanced Micro Devices Inc||0.25%|
|IDEXX Laboratories Inc||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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The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Treynor Ratio of 11.32 with a R-squared of 92.22 and a Alpha of -2.71. Its Beta is 1.11 while VO’s Standard Deviation is 15.65. Furthermore, the fund has a Mean Return of 1.14 and a Sharpe Ratio of 0.83.
The Invesco S&P 500 Equal Weight ETF (RSP) has a Standard Deviation of 15.36 with a Alpha of -2.45 and a Mean Return of 1.19. Its Treynor Ratio is 12.12 while RSP’s Beta is 1.1. Furthermore, the fund has a R-squared of 94.47 and a Sharpe Ratio of 0.89.
VO’s Mean Return is 0.05 points lower than that of RSP and its R-squared is 2.25 points lower. With a Standard Deviation of 15.65, VO is slightly more volatile than RSP. The Alpha and Beta of VO are 0.26 points lower and 0.01 points higher than RSP’s Alpha and Beta.
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VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VO would have resulted in a final balance of $40,404. This is a profit of $30,404 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.34%.
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%.
VO’s CAGR is 0.55 percentage points higher than that of RSP and as a result, would have yielded $1,740 more on a $10,000 investment. Thus, VO outperformed RSP by 0.55% annually.
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