IVW vs. SDY: What’s The Difference?

The iShares S&P 500 Growth ETF (IVW) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. IVW is a iShares Large Growth fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IVW and SDY? And which fund is better?

The expense ratio of IVW is 0.17 percentage points lower than SDY’s (0.18% vs. 0.35%). IVW also has a higher exposure to the technology sector and a higher standard deviation. Overall, IVW has provided higher returns than SDY over the past ten years.

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

Summary

IVW SDY
Name iShares S&P 500 Growth ETF SPDR S&P Dividend ETF
Category Large Growth Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 35.72B 19.67B
Avg. Return 16.74% 12.44%
Div. Yield 0.61% 2.65%
Expense Ratio 0.18% 0.35%

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 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%.

IVW’s dividend yield is 2.04% lower than that of SDY (0.61% vs. 2.65%). Also, IVW yielded on average 4.30% more per year over the past decade (16.74% vs. 12.44%). The expense ratio of IVW is 0.17 percentage points lower than SDY’s (0.18% vs. 0.35%).

Fund Composition

Industry Exposure

IVW vs. SDY - Industry Exposure

IVW SDY
Technology 37.8% 2.0%
Industrials 5.72% 15.89%
Energy 0.06% 5.95%
Communication Services 15.44% 4.64%
Utilities 0.47% 12.14%
Healthcare 11.88% 7.35%
Consumer Defensive 3.84% 14.01%
Real Estate 1.11% 6.57%
Financial Services 6.78% 16.32%
Consumer Cyclical 15.25% 8.68%
Basic Materials 1.65% 6.45%

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 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%.

IVW is 35.80% more exposed to the Technology sector than SDY (37.8% vs 2.0%). IVW’s exposure to Communication Services and Consumer Cyclical stocks is 10.80% higher and 6.57% higher respectively (15.44% vs. 4.64% and 15.25% vs. 8.68%). In total, Utilities, Real Estate, and Basic Materials also make up 21.93% less of the fund’s holdings compared to SDY (3.23% vs. 25.16%).

Holdings

IVW - Holdings

IVW Holdings Weight
Apple Inc 11.46%
Microsoft Corp 10.75%
Amazon.com Inc 7.14%
Facebook Inc Class A 4.28%
Alphabet Inc Class A 4.06%
Alphabet Inc Class C 3.86%
Tesla Inc 2.65%
NVIDIA Corp 2.43%
PayPal Holdings Inc 1.62%
Adobe Inc 1.49%

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%.

SDY - Holdings

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

IVW SDY
Mean Return 1.44 1.07
R-squared 93.82 83.62
Std. Deviation 13.77 12.9
Alpha 2.19 -0.1
Beta 0.98 0.87
Sharpe Ratio 1.21 0.95
Treynor Ratio 17.24 13.94

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

The SPDR S&P Dividend ETF (SDY) has a Mean Return of 1.07 with a Beta of 0.87 and a Alpha of -0.1. Its R-squared is 83.62 while SDY’s Standard Deviation is 12.9. Furthermore, the fund has a Treynor Ratio of 13.94 and a Sharpe Ratio of 0.95.

IVW’s Mean Return is 0.37 points higher than that of SDY and its R-squared is 10.20 points higher. With a Standard Deviation of 13.77, IVW is slightly more volatile than SDY. The Alpha and Beta of IVW are 2.29 points higher and 0.11 points higher than SDY’s Alpha and Beta.

Performance

Annual Returns

IVW vs. SDY - Annual Returns

Year IVW SDY
2020 33.21% 1.78%
2019 30.91% 23.37%
2018 -0.17% -2.73%
2017 27.2% 15.84%
2016 6.74% 20.17%
2015 5.33% -0.7%
2014 14.67% 13.8%
2013 32.48% 30.09%
2012 14.39% 11.51%
2011 4.49% 7.28%
2010 14.84% 16.41%

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 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

IVW vs. SDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IVW $10,000 $51,915 16.74%
SDY $10,000 $34,806 12.44%

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 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%.

IVW’s CAGR is 4.30 percentage points higher than that of SDY and as a result, would have yielded $17,109 more on a $10,000 investment. Thus, IVW outperformed SDY by 4.30% annually.


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