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IVW vs. MDY: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between IVW and MDY? And which fund is better?

The expense ratio of IVW is 0.05 percentage points lower than MDY’s (0.18% vs. 0.23%). IVW also has a higher exposure to the technology sector and a lower standard deviation. Overall, IVW has provided higher returns than MDY over the past ten years.

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

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Summary

IVWMDY
NameiShares S&P 500 Growth ETFSPDR S&P MIDCAP 400 ETF Trust
CategoryLarge GrowthMid-Cap Blend
IssueriSharesSPDR State Street Global Advisors
AUM35.72B21.31B
Avg. Return16.74%13.29%
Div. Yield0.61%0.94%
Expense Ratio0.18%0.23%

The iShares S&P 500 Growth ETF (IVW) is a Large Growth fund that is issued by iShares. It currently has 35.72B total assets under management and has yielded an average annual return of 16.74% over the past 10 years. The fund has a dividend yield of 0.61% with an expense ratio of 0.18%.

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%.

IVW’s dividend yield is 0.33% lower than that of MDY (0.61% vs. 0.94%). Also, IVW yielded on average 3.45% more per year over the past decade (16.74% vs. 13.29%). The expense ratio of IVW is 0.05 percentage points lower than MDY’s (0.18% vs. 0.23%).

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Fund Composition

Industry Exposure

IVW vs. MDY - Industry Exposure

IVWMDY
Technology37.8%14.74%
Industrials5.72%17.88%
Energy0.06%2.52%
Communication Services15.44%1.63%
Utilities0.47%2.84%
Healthcare11.88%11.17%
Consumer Defensive3.84%4.2%
Real Estate1.11%9.66%
Financial Services6.78%15.2%
Consumer Cyclical15.25%14.89%
Basic Materials1.65%5.27%

The iShares S&P 500 Growth ETF (IVW) has the most exposure to the Technology sector at 37.8%. This is followed by Communication Services and Consumer Cyclical at 15.44% and 15.25% respectively. Utilities (0.47%), Real Estate (1.11%), and Basic Materials (1.65%) only make up 3.23% of the fund’s total assets.

IVW’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Consumer Cyclical stocks at 3.84%, 5.72%, 6.78%, 11.88%, and 15.25%.

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%.

IVW is 23.06% more exposed to the Technology sector than MDY (37.8% vs 14.74%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 13.81% higher and 0.36% higher respectively (15.44% vs. 1.63% and 15.25% vs. 14.89%). In total, Utilities, Real Estate, and Basic Materials also make up 14.54% less of the fund’s holdings compared to MDY (3.23% vs. 17.77%).

Holdings

IVW - Holdings

IVW HoldingsWeight
Apple Inc11.46%
Microsoft Corp10.75%
Amazon.com Inc7.14%
Facebook Inc Class A4.28%
Alphabet Inc Class A4.06%
Alphabet Inc Class C3.86%
Tesla Inc2.65%
NVIDIA Corp2.43%
PayPal Holdings Inc1.62%
Adobe Inc1.49%

IVW’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 11.46%, 10.75%, 7.14%, 4.28%, and 4.06%.

Alphabet Inc Class C (3.86%), Tesla Inc (2.65%), and NVIDIA Corp (2.43%) have a slightly smaller but still significant weight. PayPal Holdings Inc and Adobe Inc are also represented in the IVW’s holdings at 1.62% and 1.49%.

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

IVWMDY
Mean Return1.441.08
R-squared93.8286.66
Std. Deviation13.7716.83
Alpha2.19-4.1
Beta0.981.15
Sharpe Ratio1.210.73
Treynor Ratio17.249.97

The iShares S&P 500 Growth ETF (IVW) has a Alpha of 2.19 with a Sharpe Ratio of 1.21 and a R-squared of 93.82. Its Treynor Ratio is 17.24 while IVW’s Mean Return is 1.44. Furthermore, the fund has a Standard Deviation of 13.77 and a Beta of 0.98.

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

IVW’s Mean Return is 0.36 points higher than that of MDY and its R-squared is 7.16 points higher. With a Standard Deviation of 13.77, IVW is slightly less volatile than MDY. The Alpha and Beta of IVW are 6.29 points higher and 0.17 points lower than MDY’s Alpha and Beta.

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Performance

Annual Returns

IVW vs. MDY - Annual Returns

YearIVWMDY
202033.21%13.51%
201930.91%25.86%
2018-0.17%-11.28%
201727.2%15.89%
20166.74%20.33%
20155.33%-2.4%
201414.67%9.42%
201332.48%33.08%
201214.39%17.58%
20114.49%-1.99%
201014.84%26.17%

IVW had its best year in 2020 with an annual return of 33.21%. IVW’s worst year over the past decade yielded -0.17% and occurred in 2018. In most years the iShares S&P 500 Growth ETF provided moderate returns such as in 2012, 2014, and 2010 where annual returns amounted to 14.39%, 14.67%, and 14.84% 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

IVW vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVW$10,000$51,91516.74%
MDY$10,000$36,52413.29%

A $10,000 investment in IVW would have resulted in a final balance of $51,915. This is a profit of $41,915 over 11 years and amounts to a compound annual growth rate (CAGR) of 16.74%.

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%.

IVW’s CAGR is 3.45 percentage points higher than that of MDY and as a result, would have yielded $15,391 more on a $10,000 investment. Thus, IVW outperformed MDY by 3.45% annually.


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