RSP ETF Beating VOO, SPY as S&P 500 Equal Weight Fund Nears $100 Billion Milestone – State Street SPDR S&
RSP ETF is Nearing a $100 Billion Milestone
ETF Db data shows that the RSP ETF has added over $12.2 billion in assets this year. Together with its performance, it is now nearing the $100 billion assets under management (AUM) milestone. It has over $98.5 billion in AUM, much higher than what it had last year.
RSP is a unique fund in that it tracks all the companies in the S&P 500 Index, with the main difference being that they all have an equal weight. As a result, this weighting means that its exposure is tilted towards smaller companies in the index.
Top Magnificent 7 Stocks Have Underperformed the Market This Year
RSP has beaten the VOO and SPY ETFs this year because of the ongoing performance of the Magnificent 7 companies. Nvidia, despite its role in the AI space, has dropped by over 15% from the year-to-date high. Tesla has dropped by 37%, Alphabet by 11%, while Microsoft has dropped by 17%.
On the other hand, small-cap companies have done relatively well this year. The popular IShares Russell 2000 ETF (NYSE:IWM) has jumped by over 18% this year as investors have rotated to smaller companies.
The RSP ETF also trades at a more attractive valuation than VOO and SPY. It has a forward price-to-earnings (P/E) ratio of 16.9, compared with about 20 for both VOO and SPY, suggesting that investors are paying less for each dollar of expected earnings.
Still, historically, the market cap-weighted funds have done better than the equal-weight one. For example, VOO and SPY have had a total return of 83% in the last five years compared to RSP’s 53%.
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