Difference between RSP and VOO ETF

Both invest in the same 500 companies (S&P 500)

Difference between:

• Invesco S&P 500 Equal Weight ETF (RSP)
• Vanguard S&P 500 ETF (VOO)

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Core Difference (this is EVERYTHING)

Both invest in the same 500 companies (S&P 500) — but the way they weight them is completely different:

• VOO ? Market-cap weighted

  • Bigger companies = bigger influence
  • Apple, Microsoft, Nvidia dominate

• RSP ? Equal-weighted

  • Every company gets ~0.2%
  • Small and mid companies matter more

• This single difference drives returns, risk, diversification, and cost

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Side-by-Side Comparison

| Feature           | RSP                                  | VOO               |
| ----------------- | ------------------------------------ | ----------------- |
| Strategy          | Equal weight                         | Market-cap weight |
| Expense ratio     | ~0.20%                               | ~0.03%            |
| Diversification   | Very high (balanced)                 | Lower (top-heavy) |
| Tech exposure     | ~16%                                 | ~30–35%           |
| Top 10 weight     | ~3%                                  | ~30%+             |
| Long-term returns | Lower                                | Higher            |
| Volatility        | Slightly higher                      | Slightly lower    |
| Rebalancing       | Quarterly (sell winners, buy losers) | Passive           |

Sources: (ETF Database)

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Performance (important reality)

• Over the last 10+ years, VOO has clearly outperformed (Quantflowlab)

• Example:

  • $10K ? VOO ˜ $39K
  • $10K ? RSP ˜ $29K (Quantflowlab)

• Why? Because mega-cap tech (Apple, Nvidia, Microsoft) dominated the market.

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Risk & Behavior Differences

VOO (market-cap)

Pros

• Lower cost
• Strong historical returns
• Simple, “set and forget”

Cons

• Very concentrated in a few stocks
• If big tech drops ? you feel it hard

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RSP (equal-weight)

Pros

• Much better diversification
• Less dependent on big tech
• “Buy low, sell high” built-in (rebalancing)

Cons

• Higher fees
• Lower returns during tech-driven markets
• More turnover (less tax efficient)

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When Each One Wins

VOO wins when:

• Big tech dominates (like 2020–2025)
• Market is driven by a few winners

RSP wins when:

• Broader market rallies (small/mid caps)
• Market leadership rotates
• Tech underperforms

• This is why results flip depending on market cycles (The Motley Fool)

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So… Which Is Better?

For most investors ? VOO is better

• Lower cost (huge advantage long-term)
• Higher historical returns
• Simpler strategy

Best for:

• Long-term investing (like your VOO plan)
• Passive wealth building
• “Don’t overthink it” approach

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RSP is better if you want:

• More diversification
• Less tech concentration
• A different strategy than the standard S&P 500

? Best for:

• Reducing dependence on mega-cap stocks
• Adding variety to a portfolio

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Smart Strategy (what many investors do)

Instead of choosing one:

Combine both:

• 70–90% VOO
• 10–30% RSP

This gives you:

• Growth (VOO)
• Diversification (RSP)

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• VOO = growth + low cost + proven winner
• RSP = diversification + balance + alternative exposure

• If you asked me simply:

• “Which one should I invest in?”

• I’d say: VOO as your core holding
• Add RSP only if you understand why you want it