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ITOT vs. MDY: What’s The Difference?

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between ITOT and MDY? And which fund is better?

The expense ratio of ITOT is 0.20 percentage points lower than MDY’s (0.03% vs. 0.23%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than MDY over the past ten years.

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

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Summary

ITOTMDY
NameiShares Core S&P Total U.S. Stock Market ETFSPDR S&P MIDCAP 400 ETF Trust
CategoryLarge BlendMid-Cap Blend
IssueriSharesSPDR State Street Global Advisors
AUM41.97B21.31B
Avg. Return14.59%13.29%
Div. Yield1.2%0.94%
Expense Ratio0.03%0.23%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

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%.

ITOT’s dividend yield is 0.26% higher than that of MDY (1.2% vs. 0.94%). Also, ITOT yielded on average 1.30% more per year over the past decade (14.59% vs. 13.29%). The expense ratio of ITOT is 0.20 percentage points lower than MDY’s (0.03% vs. 0.23%).

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Fund Composition

Industry Exposure

ITOT vs. MDY - Industry Exposure

ITOTMDY
Technology24.49%14.74%
Industrials9.21%17.88%
Energy2.51%2.52%
Communication Services10.54%1.63%
Utilities2.35%2.84%
Healthcare13.59%11.17%
Consumer Defensive5.79%4.2%
Real Estate3.67%9.66%
Financial Services13.69%15.2%
Consumer Cyclical11.69%14.89%
Basic Materials2.47%5.27%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has the most exposure to the Industrials sector at 17.88%. This is followed by Financial Services and Consumer Cyclical at 15.2% and 14.89% respectively. Energy (2.52%), Utilities (2.84%), and Consumer Defensive (4.2%) only make up 9.56% of the fund’s total assets.

MDY’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Consumer Cyclical stocks at 5.27%, 9.66%, 11.17%, 14.74%, and 14.89%.

ITOT is 9.75% more exposed to the Technology sector than MDY (24.49% vs 14.74%). ITOT’s exposure to Financial Services and Healthcare stocks is 1.51% lower and 2.42% higher respectively (13.69% vs. 15.2% and 13.59% vs. 11.17%). In total, Basic Materials, Energy, and Real Estate also make up 8.80% less of the fund’s holdings compared to MDY (8.65% vs. 17.45%).

Holdings

ITOT - Holdings

ITOT HoldingsWeight
Apple Inc5.07%
Microsoft Corp4.75%
Amazon.com Inc3.16%
Facebook Inc Class A1.89%
Alphabet Inc Class A1.79%
Alphabet Inc Class C1.71%
Tesla Inc1.17%
Berkshire Hathaway Inc Class B1.17%
NVIDIA Corp1.08%
JPMorgan Chase & Co1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

MDY - Holdings

MDY HoldingsWeight
Bio-Techne Corp0.75%
Molina Healthcare Inc0.63%
Cognex Corp0.63%
Fair Isaac Corp0.62%
XPO Logistics Inc0.61%
SolarEdge Technologies Inc0.61%
Signature Bank0.6%
Graco Inc0.55%
Camden Property Trust0.55%
FactSet Research Systems Inc0.54%

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%.

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Risk Analysis

ITOTMDY
Mean Return1.271.08
R-squared99.486.66
Std. Deviation14.0216.83
Alpha-0.54-4.1
Beta1.031.15
Sharpe Ratio1.040.73
Treynor Ratio14.139.97

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a R-squared of 99.4 with a Alpha of -0.54 and a Standard Deviation of 14.02. Its Treynor Ratio is 14.13 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a Beta of 1.03 and a Mean Return of 1.27.

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

ITOT’s Mean Return is 0.19 points higher than that of MDY and its R-squared is 12.74 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than MDY. The Alpha and Beta of ITOT are 3.56 points higher and 0.12 points lower than MDY’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. MDY - Annual Returns

YearITOTMDY
202020.75%13.51%
201930.87%25.86%
2018-5.27%-11.28%
201721.23%15.89%
201612.59%20.33%
20150.96%-2.4%
201413.01%9.42%
201332.67%33.08%
201215.98%17.58%
20111.55%-1.99%
201016.15%26.17%

ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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

ITOT vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$42,31014.59%
MDY$10,000$36,52413.29%

A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.

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%.

ITOT’s CAGR is 1.30 percentage points higher than that of MDY and as a result, would have yielded $5,786 more on a $10,000 investment. Thus, ITOT outperformed MDY by 1.30% annually.


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