RSP vs SPY

RSPBInvesco S&P 500 Equal Weight ETF

SPYBState Street SPDR S&P 500 ETF

In short

RSP Same 500 companies as the S&P 500, sliced evenly instead of by size. Running since 2003, it is the large, heavily traded way to own the index without letting a handful of megacaps call the shots.

SPY The 1993 original, and still the ticker the market trades through. Same roughly 500 S&P 500 names as its cheaper cousins; the edge here is the crowd around it, not the fee.

Stated mandate

RSP The fund is designed to provide exposure to the S&P 500 while equally weighting the stocks in that index.

SPY The fund seeks to track, before expenses, the price and yield performance of the S&P 500 Index.

Why people hold it

• RSP Every name gets the same slice: about 500 S&P 500 members, equally weighted, so no small group of giants steers the whole fund.
• One job, done plainly. Hold the S&P 500's companies and weight them equally. No stock picking, no forecasts, no tilt beyond the equal-weight rule.
• Trading since 2003 and now a multi-billion-dollar, very actively traded fund, which tends to make getting in and out cheap. Distributions land quarterly.

• SPY One of the most heavily traded funds in the market, and one of the largest. That depth is why desks treat it as the default way to move S&P 500 exposure.
• Its stated job is to track the S&P 500 before expenses, and it hews to that benchmark about as closely as anything in its peer group.
• At 0.09% a year it still undercuts the typical S&P 500 wrapper in its cohort, and it lands in the upper half of that group overall.

Worth knowing

• RSP The 0.20% annual fee sits above the median for S&P 500 trackers and well above cap-weighted siblings like VOO and IVV at 0.03%.
• Equal weighting leans toward the index's smaller members, so results can diverge from the headline S&P 500 in either direction.
• Keeping weights level takes ongoing rebalancing, so turnover runs higher than a cap-weighted fund that simply lets winners ride.

• SPY That liquidity has a price: VOO, IVV and SPYM track the same index for a few basis points, and the fee gap compounds over a long hold.
• It is a unit investment trust, the older 1993-vintage wrapper: it holds the index as declared and pays dividends out on a quarterly schedule.
• About 500 stocks, cap-weighted, so the largest companies carry the most weight; equal-weight takes on the same index, like RSP, spread it differently.

Full RSP profile⁠

Full SPY profile⁠