|
|
Post by Broozer on Feb 4, 2024 16:32:24 GMT
Aside from the different weighting methods, they are both based on the S&P 500 index. The SPY ETF is about 10 times larger than RSP. With this post I am only caring about tax consequences; I'm aware of the performance differences.
SPY shows assets of $497B, 504 holdings, and a turnover rate of 2%.
RSP shows assets of $50B, 505 holdings, and a turnover rate of 21%.
Why the huge difference in turnover rate? Does the equal-weighted RSP somehow magnify the turnover rate? The 10x asset size difference is also the turnover rate difference.
|
|
|
|
Post by yogibearbull on Feb 4, 2024 17:30:58 GMT
RSP (ER 0.20%) rebalances quarterly and reconstitutes annually. The theoretical equal-weight for 500 stocks in 0.20%, so quarterly weight adjustments lead to higher turnover than the market-cap based IVV/VOO/SPY. Yet, M* shows that it hasn't distributed any CGs for the last 5 years (& probably longer, but I haven't checked). IMO, it is a good idea to hold both SP500 (IVV or VOO or SPY) and equal-weight RSP. There are also equal-weight versions for many other funds, ybbpersonalfinance.proboards.com/post/1097/thread
|
|
|
|
Post by racqueteer on Feb 4, 2024 17:42:23 GMT
Just in terms of math, the heaviest weighted components have zero turnover; so you have a very large percentage of zeros averaged in. With RSP, you have a much smaller percentage of zeros being added in; so the overall average has to rise.
|
|
|
|
Post by Broozer on Feb 4, 2024 22:21:28 GMT
RSP (ER 0.20%) rebalances quarterly and reconstitutes annually. The theoretical equal-weight for 500 stocks in 0.20%, so quarterly weight adjustments lead to higher turnover than the market-cap based IVV/VOO/SPY. Yet, M* shows that it hasn't distributed any CGs for the last 5 years (& probably longer, but I haven't checked). IMO, it is a good idea to hold both SP500 (IVV or VOO or SPY) and equal-weight RSP. There are also equal-weight versions for many other funds, ybbpersonalfinance.proboards.com/post/1097/thread Thanks Yogi, that makes sense. Holding both is an interesting thought.  |
|
|
|
Post by Broozer on Feb 4, 2024 22:25:21 GMT
Just in terms of math, the heaviest weighted components have zero turnover; so you have a very large percentage of zeros averaged in. With RSP, you have a much smaller percentage of zeros being added in; so the ovreally average has to rise. Thanks, you guys answered my question.  |
|
