S&P 500 Comparison: How Invesco's Equal-Weighted RSP Compares to Vanguard's VOO

The Vanguard S&P 500 ETF (NYSEMKT:VOO) and the Invesco S&P 500 Equal Weight ETF (NYSEMKT:RSP) both track the S&P 500, yet their approaches differ.

While VOO tracks the traditional market-cap-weighted index, amplifying exposure to the largest names, RSP gives every constituent equal footing. This comparison unpacks how those structural choices affect cost, returns, risk, and portfolio composition.

Snapshot (cost & size)

Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months.

RSP costs more to own each year than VOO but pays out a slightly higher dividend yield, which could appeal to investors seeking a bit more income from their ETF holding.

Performance & risk comparison

What's inside

RSP holds all S&P 500 names, but by giving each company equal weight, it significantly reduces exposure to mega-cap tech stocks. Its sector allocation is more balanced, with technology making up 16% of the fund, industrials at 15%, and financial services at 14%. Each of its holdings represents less than 0.3% of assets, limiting single-stock risk.

VOO holds the same stocks but mirrors the S&P 500’s market-cap weighting, resulting in technology accounting for 35% of assets. Its top positions include Nvidia, Apple, and Microsoft, with each exceeding 6% of the portfolio.

For more guidance on ETF investing, check out the full guide at this link.

What this means for investors

Both RSP and VOO track the S&P 500, but they use different methodologies. With VOO, larger companies make up larger portions of the portfolio. RSP, on the other hand, gives each stock the same weighting regardless of the company's size.

Although both funds hold the same stocks, VOO is the higher-risk, higher-reward investment. Its top three stocks make up just over 20% of the entire portfolio, while RSP's top three holdings account for less than 1% of the fund.

This heavy tilt toward a handful of individual stocks can make VOO more lucrative when those particular companies are thriving, but if they falter, this ETF could also be hit harder. Case in point: VOO has outperformed RSP in both 12-month and five-year total returns, but it's also experienced a steeper max drawdown -- indicating more significant volatility.

Where you choose to invest will depend on your goals and risk tolerance. Those seeking a more stable investment that's less prone to price swings may prefer RSP's equal-weighted approach, while those willing to take on slightly more risk for the chance to earn higher returns may opt for VOO.

Glossary

ETF (Exchange-traded fund): A fund that trades on stock exchanges, holding a basket of underlying securities.
Expense ratio: The annual fee a fund charges investors, expressed as a percentage of assets invested.
Dividend yield: Annual dividends paid by a fund or stock divided by its current share price.
Market-cap-weighted index: Index where each company’s weight is based on its total market value, favoring larger companies.
Equal weight: Index or fund approach giving each constituent the same portfolio weight, regardless of company size.
Beta: A measure of an investment’s volatility compared with the overall market, typically the S&P 500.
AUM (Assets under management): The total market value of all assets a fund or manager oversees.
Max drawdown: The largest peak-to-trough decline in value over a specific period, showing worst-case loss.
Total return: Investment performance including price changes plus all dividends and distributions, assuming they are reinvested.
Sector allocation: How a fund’s assets are distributed across different industries, such as technology or financials.
Concentration risk: Risk that performance is overly dependent on a small number of holdings or sectors.
Single-stock risk: Risk that poor performance of one company significantly impacts a portfolio’s overall return.

Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Microsoft, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.