BSV vs. MDY: What’s The Difference?

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. BSV is a Vanguard Short-Term Bond fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between BSV and MDY? And which fund is better?

The expense ratio of BSV is 0.18 percentage points lower than MDY’s (0.05% vs. 0.23%). BSV is mostly comprised of AAA bonds while MDY has a high exposure to the industrials sector. Overall, BSV has provided lower returns than MDY over the past ten years.

In this article, we’ll compare BSV vs. MDY. We’ll look at holdings and portfolio growth, as well as at their annual returns and performance. Moreover, I’ll also discuss BSV’s and MDY’s industry exposure, risk metrics, and fund composition and examine how these affect their overall returns.

Summary

BSV MDY
Name Vanguard Short-Term Bond Index Fund ETF Shares SPDR S&P MIDCAP 400 ETF Trust
Category Short-Term Bond Mid-Cap Blend
Issuer Vanguard SPDR State Street Global Advisors
AUM 67.71B 21.31B
Avg. Return 2.27% 13.29%
Div. Yield 1.48% 0.94%
Expense Ratio 0.05% 0.23%

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) is a Short-Term Bond fund that is issued by Vanguard. It currently has 67.71B total assets under management and has yielded an average annual return of 2.27% over the past 10 years. The fund has a dividend yield of 1.48% with an expense ratio of 0.05%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) is a Mid-Cap Blend fund that is issued by SPDR State Street Global Advisors. It currently has 21.31B total assets under management and has yielded an average annual return of 13.29% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.23%.

BSV’s dividend yield is 0.54% higher than that of MDY (1.48% vs. 0.94%). Also, BSV yielded on average 11.02% less per year over the past decade (2.27% vs. 13.29%). The expense ratio of BSV is 0.18 percentage points lower than MDY’s (0.05% vs. 0.23%).

Fund Composition

Holdings

BSV - Holdings

BSV Bond Sectors Weight
AAA 71.65%
BBB 13.08%
A 11.95%
AA 3.28%
Others 0.03%
Below B 0.01%
B 0.0%
BB 0.0%
US Government 0.0%

BSV’s Top Bond Sectors are ratings of AAA, BBB, A, AA, and Others at 71.65%, 13.08%, 11.95%, 3.28%, and 0.03%. The fund is less weighted towards Below B (0.01%), B (0.0%), and BB (0.0%) rated bonds.

MDY - Holdings

MDY Holdings Weight
Bio-Techne Corp 0.75%
Molina Healthcare Inc 0.63%
Cognex Corp 0.63%
Fair Isaac Corp 0.62%
XPO Logistics Inc 0.61%
SolarEdge Technologies Inc 0.61%
Signature Bank 0.6%
Graco Inc 0.55%
Camden Property Trust 0.55%
FactSet Research Systems Inc 0.54%

MDY’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and XPO Logistics Inc at 0.75%, 0.63%, 0.63%, 0.62%, and 0.61%.

SolarEdge Technologies Inc (0.61%), Signature Bank (0.6%), and Graco Inc (0.55%) have a slightly smaller but still significant weight. Camden Property Trust and FactSet Research Systems Inc are also represented in the MDY’s holdings at 0.55% and 0.54%.

Risk Analysis

BSV MDY
Mean Return 0.16 1.08
R-squared 78.38 86.66
Std. Deviation 1.33 16.83
Alpha 0.21 -4.1
Beta 0.38 1.15
Sharpe Ratio 0.98 0.73
Treynor Ratio 3.33 9.97

The Vanguard Short-Term Bond Index Fund ETF Shares (BSV) has a Standard Deviation of 1.33 with a Treynor Ratio of 3.33 and a Sharpe Ratio of 0.98. Its Beta is 0.38 while BSV’s Mean Return is 0.16. Furthermore, the fund has a R-squared of 78.38 and a Alpha of 0.21.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Sharpe Ratio of 0.73 with a Mean Return of 1.08 and a Treynor Ratio of 9.97. Its Alpha is -4.1 while MDY’s R-squared is 86.66. Furthermore, the fund has a Standard Deviation of 16.83 and a Beta of 1.15.

BSV’s Mean Return is 0.92 points lower than that of MDY and its R-squared is 8.28 points lower. With a Standard Deviation of 1.33, BSV is slightly less volatile than MDY. The Alpha and Beta of BSV are 4.31 points higher and 0.77 points lower than MDY’s Alpha and Beta.

Performance

Annual Returns

BSV vs. MDY - Annual Returns

Year BSV MDY
2020 4.67% 13.51%
2019 4.92% 25.86%
2018 1.34% -11.28%
2017 1.2% 15.89%
2016 1.42% 20.33%
2015 0.92% -2.4%
2014 1.32% 9.42%
2013 0.17% 33.08%
2012 1.98% 17.58%
2011 3.04% -1.99%
2010 4.0% 26.17%

BSV had its best year in 2019 with an annual return of 4.92%. BSV’s worst year over the past decade yielded 0.17% and occurred in 2013. In most years the Vanguard Short-Term Bond Index Fund ETF Shares provided moderate returns such as in 2018, 2016, and 2012 where annual returns amounted to 1.34%, 1.42%, and 1.98% respectively.

The year 2013 was the strongest year for MDY, returning 33.08% on an annual basis. The poorest year for MDY in the last ten years was 2018, with a yield of -11.28%. Most years the SPDR S&P MIDCAP 400 ETF Trust has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.51%, 15.89%, and 17.58% respectively.

Portfolio Growth

BSV vs. MDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
BSV $10,000 $12,785 2.27%
MDY $10,000 $36,524 13.29%

A $10,000 investment in BSV would have resulted in a final balance of $12,785. This is a profit of $2,785 over 11 years and amounts to a compound annual growth rate (CAGR) of 2.27%.

With a $10,000 investment in MDY, the end total would have been $36,524. This equates to a $26,524 profit over 11 years and a compound annual growth rate (CAGR) of 13.29%.

BSV’s CAGR is 11.02 percentage points lower than that of MDY and as a result, would have yielded $23,739 less on a $10,000 investment. Thus, BSV performed worse than MDY by 11.02% annually.


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