Someone Switched From VOO to RSP at the Start of the Year. Here Is What Happened.

Core Insights - The article discusses the performance comparison between two ETFs: Vanguard S&P 500 ETF (VOO) and Invesco S&P 500 Equal Weight ETF (RSP) in 2026, highlighting the short-term outperformance of RSP but cautioning against making investment decisions based solely on recent performance [2][6][7]. Performance Comparison - As of March 23, 2026, RSP has achieved a total return of 0.49% year-to-date, while VOO has declined by 3.62% [7]. - Over a longer time frame from September 2010 to March 2026, VOO has outperformed RSP with an annualized return of 14.24% compared to RSP's 12.33% [14][15]. Portfolio Composition - Switching from VOO to RSP significantly alters sector exposure, reducing technology exposure from approximately 33% to about 14%, while increasing industrials from around 8.5% to roughly 15.5% [9][11]. - VOO's top 15 holdings account for about 42.1% of the fund, whereas RSP's top positions make up only 4.5%, indicating a much more diversified capital distribution in RSP [12]. Investment Strategy - VOO follows a market cap-weighted index, favoring mega-cap tech stocks, while RSP employs an equal-weight strategy that balances exposure across sectors and reduces reliance on any single group of stocks [10][11]. - The equal-weight approach of RSP may limit upside potential by systematically trimming high-performing stocks during rebalancing, which can hinder long-term returns [16]. Cost Considerations - RSP has a higher expense ratio of 0.20% compared to VOO's 0.03%, which can negatively impact returns over long holding periods due to compounding effects [17].