The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between ITOT and SDY? And which fund is better?
The expense ratio of ITOT is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%). ITOT also has a higher exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided higher returns than SDY over the past ten years.
In this article, we’ll compare ITOT vs. SDY. We’ll look at annual returns and risk metrics, as well as at their holdings and performance. Moreover, I’ll also discuss ITOT’s and SDY’s industry exposure, fund composition, and portfolio growth and examine how these affect their overall returns.
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Summary
| ITOT | SDY | |
| Name | iShares Core S&P Total U.S. Stock Market ETF | SPDR S&P Dividend ETF |
| Category | Large Blend | Large Value |
| Issuer | iShares | SPDR State Street Global Advisors |
| AUM | 41.97B | 19.67B |
| Avg. Return | 14.59% | 12.44% |
| Div. Yield | 1.2% | 2.65% |
| Expense Ratio | 0.03% | 0.35% |
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 Dividend ETF (SDY) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 19.67B total assets under management and has yielded an average annual return of 12.44% over the past 10 years. The fund has a dividend yield of 2.65% with an expense ratio of 0.35%.
ITOT’s dividend yield is 1.45% lower than that of SDY (1.2% vs. 2.65%). Also, ITOT yielded on average 2.15% more per year over the past decade (14.59% vs. 12.44%). The expense ratio of ITOT is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%).
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Fund Composition
Industry Exposure
| ITOT | SDY | |
| Technology | 24.49% | 2.0% |
| Industrials | 9.21% | 15.89% |
| Energy | 2.51% | 5.95% |
| Communication Services | 10.54% | 4.64% |
| Utilities | 2.35% | 12.14% |
| Healthcare | 13.59% | 7.35% |
| Consumer Defensive | 5.79% | 14.01% |
| Real Estate | 3.67% | 6.57% |
| Financial Services | 13.69% | 16.32% |
| Consumer Cyclical | 11.69% | 8.68% |
| Basic Materials | 2.47% | 6.45% |
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 Dividend ETF (SDY) has the most exposure to the Financial Services sector at 16.32%. This is followed by Industrials and Consumer Defensive at 15.89% and 14.01% respectively. Communication Services (4.64%), Energy (5.95%), and Basic Materials (6.45%) only make up 17.04% of the fund’s total assets.
SDY’s mid-section with moderate exposure is comprised of Real Estate, Healthcare, Consumer Cyclical, Utilities, and Consumer Defensive stocks at 6.57%, 7.35%, 8.68%, 12.14%, and 14.01%.
ITOT is 22.49% more exposed to the Technology sector than SDY (24.49% vs 2.0%). ITOT’s exposure to Financial Services and Healthcare stocks is 2.63% lower and 6.24% higher respectively (13.69% vs. 16.32% and 13.59% vs. 7.35%). In total, Basic Materials, Energy, and Real Estate also make up 10.32% less of the fund’s holdings compared to SDY (8.65% vs. 18.97%).
Holdings
| ITOT Holdings | Weight |
| Apple Inc | 5.07% |
| Microsoft Corp | 4.75% |
| Amazon.com Inc | 3.16% |
| Facebook Inc Class A | 1.89% |
| Alphabet Inc Class A | 1.79% |
| Alphabet Inc Class C | 1.71% |
| Tesla Inc | 1.17% |
| Berkshire Hathaway Inc Class B | 1.17% |
| NVIDIA Corp | 1.08% |
| JPMorgan Chase & Co | 1.02% |
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%.
| SDY Holdings | Weight |
| Exxon Mobil Corp | 2.81% |
| AT&T Inc | 2.5% |
| South Jersey Industries Inc | 2.22% |
| Chevron Corp | 2.02% |
| International Business Machines Corp | 2.0% |
| AbbVie Inc | 1.93% |
| National Retail Properties Inc | 1.86% |
| Federal Realty Investment Trust | 1.77% |
| Realty Income Corp | 1.7% |
| Old Republic International Corp | 1.65% |
SDY’s Top Holdings are Exxon Mobil Corp, AT&T Inc, South Jersey Industries Inc, Chevron Corp, and International Business Machines Corp at 2.81%, 2.5%, 2.22%, 2.02%, and 2.0%.
AbbVie Inc (1.93%), National Retail Properties Inc (1.86%), and Federal Realty Investment Trust (1.77%) have a slightly smaller but still significant weight. Realty Income Corp and Old Republic International Corp are also represented in the SDY’s holdings at 1.7% and 1.65%.
Risk Analysis
| ITOT | SDY | |
| Mean Return | 1.27 | 1.07 |
| R-squared | 99.4 | 83.62 |
| Std. Deviation | 14.02 | 12.9 |
| Alpha | -0.54 | -0.1 |
| Beta | 1.03 | 0.87 |
| Sharpe Ratio | 1.04 | 0.95 |
| Treynor Ratio | 14.13 | 13.94 |
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Standard Deviation of 14.02 with a Treynor Ratio of 14.13 and a Beta of 1.03. Its Mean Return is 1.27 while ITOT’s R-squared is 99.4. Furthermore, the fund has a Alpha of -0.54 and a Sharpe Ratio of 1.04.
The SPDR S&P Dividend ETF (SDY) has a Beta of 0.87 with a Mean Return of 1.07 and a R-squared of 83.62. Its Standard Deviation is 12.9 while SDY’s Alpha is -0.1. Furthermore, the fund has a Sharpe Ratio of 0.95 and a Treynor Ratio of 13.94.
ITOT’s Mean Return is 0.20 points higher than that of SDY and its R-squared is 15.78 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than SDY. The Alpha and Beta of ITOT are 0.44 points lower and 0.16 points higher than SDY’s Alpha and Beta.
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Performance
Annual Returns
| Year | ITOT | SDY |
| 2020 | 20.75% | 1.78% |
| 2019 | 30.87% | 23.37% |
| 2018 | -5.27% | -2.73% |
| 2017 | 21.23% | 15.84% |
| 2016 | 12.59% | 20.17% |
| 2015 | 0.96% | -0.7% |
| 2014 | 13.01% | 13.8% |
| 2013 | 32.67% | 30.09% |
| 2012 | 15.98% | 11.51% |
| 2011 | 1.55% | 7.28% |
| 2010 | 16.15% | 16.41% |
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 SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| ITOT | $10,000 | $42,310 | 14.59% |
| SDY | $10,000 | $34,806 | 12.44% |
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 SDY, the end total would have been $34,806. This equates to a $24,806 profit over 11 years and a compound annual growth rate (CAGR) of 12.44%.
ITOT’s CAGR is 2.15 percentage points higher than that of SDY and as a result, would have yielded $7,504 more on a $10,000 investment. Thus, ITOT outperformed SDY by 2.15% annually.
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