RSP vs VOO

[Deleted]

VOO is SP500. It is cap weighted. So FAAGM are like 25% of it. E/r is only 0.03.

RSP is SP500 but equal weighted so FAAGM is like 1.25% of it. E/R is high 0.20 for index fund.

Going forward which one to invest in. We had big outperformance of FAANGM stocks last 10 years so I am thinking RSP.

What do you think? Should I consider any other index ETF?

[yogibearbull]

With so many factor flavors available now (growth, value, dividend, quality, etc), I think equal-weight isn't attractive now. Things were different when it was the only non-market-cap alternative. 

[steelpony10]

@waffle ,

          We use Fund Performance as a screener.
       
          You answered your own question outperformance of VOO is due to tech. Check VV and VTI also. RSP has been more volatile since 2010. We settled on VTI as our core equity holding as the most conservative LC blend index. This would be secondary income for us at this juncture though. We goose the return by adding positions in VOT (MC) and VUG (LC) growth.

[Fearchar]

Morningstar is Neutral on RSP.
RSP gives more weight to mid-caps, which increases turnover and volatility but without any clear benefit.
All that for 0.2%/year.

The problem with the S&P index is valuation related more so than market cap.
Higher growth stock are trading at illogically higher multiples than low growth.
The higher multiples do not make sense considering the different growth rates.
In other words, across the range of market caps growth stocks are more expensive now than they have been over the last 20+ years.
Small growth, mid cap growth and large cap growth are all  too expensive.
Giving more weight to mid caps isn't the answer.

[jongaltiii]

Still reviewing VONG myself. Perhaps that’s a better option given the number of stocks in it.

[Deleted]

VONG is 50% in
1. Apple Inc.
2 Microsoft Corp.
3 Amazon.com Inc.
4 Alphabet Inc.
5 Tesla Inc.
6 NVIDIA Corp.
7 Meta Platforms Inc.
8 Home Depot Inc.
9 Visa Inc.
10 Adobe Inc.

[richardsok]

Assume that another stellar year is unlikely. If so a low-volatility ETF like USMV, LGLV or FDLO would be good for active traders who work technical signals. (I prefer USMV.)

If you're going to buy-and-hold, QYLD is yielding almost 11% in covered calls and shares many of VONG's biggest positions. The monthly distributions would be a fine silver lining if the market disappoints.

[Chahta]

Jan 7, 2022 0:20:01 GMT steelpony10 said:

@waffle ,

          We use Fund Performance as a screener.
       
          You answered your own question outperformance of VOO is due to tech. Check VV and VTI also. RSP has been more volatile since 2010. We settled on VTI as our core equity holding as the most conservative LC blend index. This would be secondary income for us at this juncture though. We goose the return by adding positions in VOT (MC) and VUG (LC) growth.

Hi steelpony10 , VTI is Total Market, including MC and SC. SC drug VTI down for 1-15 year TR compared to VV. VOO also lost out to VV for 3-10 years. I have struggled to justify not holding Total Market but LC instead.

[steelpony10]

Chahta ,

         We went around and around with those also. I’m convinced I’ll never be able to game the 3 unknowns based on the past so I look but skip the past performance when they’re so close. Equities and a large muni are a secondary or reserve income mostly as mentioned. For that situation we wanted the most conservative equity index and that’s it to go along with a muni fund something else we consider conservative. SS is 15% tax free for us, munis are all tax free and cap gains have a better tax profile then CEF income.

          I would suggest choosing any of those and adding others to tip a core holding the way you want. We hold VUG and VOT currently to tip equities towards growth and duplication. We’ve also looked at VHT and VYM to tip away from so much tech duplication. We’re aiming towards all VTI and VUG, 2/1 to be able to spend some VUG for extras and large purchases. As you know cash flow is covered for years no matter what markets do to a point.

[FD1000]

I'm trying to stay neutral, but I owned for many years whatever float to the top.
2000-2010 mostly US value,SC,international
2011-2017 mostly US growth (when US leads, I don't have a problem to own close to 100% in the US)

I just ran a fund screener about 2-3 time annually and selected the top 5 funds from 1-3 wide range groups.

Another great option it to use core(60-70%) + explore(30-40%) where you own steady core 70% (VTI or whatever) and use your 30% explore to do the above.