SPY vs RSP: Head-to-Head Comparison

Side-by-Side Comparison

Key Differences Between SPY and RSP

SPY (SPDR S&P 500 ETF Trust) is a u.s. large-cap blend fund managed by State Street Global Advisors. SPY was the very first ETF listed in the United States and remains the most heavily traded ETF in the world. Like VOO, it tracks the S&P 500 index, but SPY is especially popular among active traders due to its enormous daily trading volume. Beginners should know that SPY and VOO hold the same stocks, but SPY has a slightly higher expense ratio.

RSP (Invesco S&P 500 Equal Weight ETF) is a us large-cap equal weight fund managed by Invesco. RSP holds all 500 stocks in the S&P 500 but gives each one an equal weight of about 0.2%, rather than weighting by market cap. This means smaller S&P 500 companies have the same influence as mega-caps like Apple or Microsoft. The equal-weight approach reduces concentration risk and provides a natural tilt toward mid-cap and value stocks within the S&P 500 universe.

The most notable differences are in fees (9.45% vs 0.20%), number of holdings (503 vs 503), and 5-year returns (15.70% vs 10.00%).

Holdings Overlap Analysis

SPY and RSP share only 5% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.

Cost Comparison Over Time

If you invest $10,000 and hold for 20 years (assuming 8% annual returns):

Over 20 years, the fee difference amounts to $37,447 on a $10,000 investment. RSP saves you more in fees over time.

Which One Should a Beginner Choose?

Choose SPY if: You want active traders who need high liquidity and tight spreads, options traders looking for the deepest options market available, institutional investors executing large block trades. It's managed by State Street Global Advisors with an expense ratio of 9.45%.

Choose RSP if: You want investors concerned about mega-cap concentration in traditional s&p 500 funds, those who believe in mean-reversion and want a systematically contrarian approach, diversification seekers who want broader s&p 500 exposure without size bias. It's managed by Invesco with an expense ratio of 0.20%.

Can You Own Both SPY and RSP?

Absolutely! With only 5% overlap, SPY and RSP complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.

Frequently Asked Questions