S&P 500 Stability vs. Mega-Cap Growth: How Invesco's RSP Compares to Vanguard's MGK

• RSP charges a higher interest but offers a importantly higher dividend output than MGK.

• MGK has outperformed RSP implicit the past one-year and five-year periods, but it's besides suffered a overmuch deeper drawdown.

• RSP provides overmuch broader assemblage diversification than the tech-heavy MGK.

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The Vanguard Mega Cap Growth ETF (NYSEMKT:MGK) and the Invesco S&P 500 Equal Weight ETF (NYSEMKT:RSP) are large, index-based U.S. equity exchange-traded funds (ETFs), but their approaches diverge sharply: MGK focuses connected the largest maturation stocks, portion RSP holds equal-weighted positions crossed the full S&P 500.

This examination looks astatine cost, yield, performance, risk, and portfolio operation to assistance investors place which whitethorn amended acceptable their needs.

Beta measures terms volatility comparative to the S&P 500. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months.

MGK is much affordable connected fees, charging a overmuch little disbursal ratio. However, RSP whitethorn entreaty to income-focused investors owed to its substantially higher dividend yield.

RSP tracks the S&P 500 Equal Weight Index, giving each constituent astir identical weighting. This attack results successful wide diversification crossed 504 holdings, with assemblage allocations dispersed among exertion (16%), industrials (15%), and fiscal services (14%).

No azygous institution dominates, and each of its holdings each correspond little than 0.3% of assets. The fund’s astir 23-year past underscores its established way record, with nary leverage, currency hedges, oregon environmental, social, and governance (ESG) overlays.

By contrast, MGK homes successful connected mega-cap growth, allocating 56% of assets to technology, 16% to connection services, and 12% to user cyclicals. The portfolio is overmuch much top-heavy, with Apple, Nvidia, and Microsoft combined making up implicit one-third of assets. This tilt results successful little diversification but much vulnerability to large-cap tech stocks.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.

RSP and MGK tin some beryllium fantastic investments, but they instrumentality starkly antithetic approaches to entreaty to antithetic types of investors.