IWD vs. SDY: What’s The Difference?

The iShares Russell 1000 Value ETF (IWD) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. IWD is a iShares Large Value fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between IWD and SDY? And which fund is better?

The expense ratio of IWD is 0.16 percentage points lower than SDY’s (0.19% vs. 0.35%). IWD also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IWD has provided lower returns than SDY over the past ten years.

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

Summary

IWD SDY
Name iShares Russell 1000 Value ETF SPDR S&P Dividend ETF
Category Large Value Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 54.1B 19.67B
Avg. Return 11.40% 12.44%
Div. Yield 1.57% 2.65%
Expense Ratio 0.19% 0.35%

The iShares Russell 1000 Value ETF (IWD) is a Large Value fund that is issued by iShares. It currently has 54.1B total assets under management and has yielded an average annual return of 11.40% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.19%.

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%.

IWD’s dividend yield is 1.08% lower than that of SDY (1.57% vs. 2.65%). Also, IWD yielded on average 1.04% less per year over the past decade (11.40% vs. 12.44%). The expense ratio of IWD is 0.16 percentage points lower than SDY’s (0.19% vs. 0.35%).

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Fund Composition

Industry Exposure

IWD vs. SDY - Industry Exposure

IWD SDY
Technology 10.28% 2.0%
Industrials 11.77% 15.89%
Energy 4.76% 5.95%
Communication Services 8.67% 4.64%
Utilities 4.88% 12.14%
Healthcare 17.78% 7.35%
Consumer Defensive 7.76% 14.01%
Real Estate 4.94% 6.57%
Financial Services 20.43% 16.32%
Consumer Cyclical 5.62% 8.68%
Basic Materials 3.1% 6.45%

The iShares Russell 1000 Value ETF (IWD) has the most exposure to the Financial Services sector at 20.43%. This is followed by Healthcare and Industrials at 17.78% and 11.77% respectively. Energy (4.76%), Utilities (4.88%), and Real Estate (4.94%) only make up 14.58% of the fund’s total assets.

IWD’s mid-section with moderate exposure is comprised of Consumer Cyclical, Consumer Defensive, Communication Services, Technology, and Industrials stocks at 5.62%, 7.76%, 8.67%, 10.28%, and 11.77%.

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%.

IWD is 4.11% more exposed to the Financial Services sector than SDY (20.43% vs 16.32%). IWD’s exposure to Healthcare and Industrials stocks is 10.43% higher and 4.12% lower respectively (17.78% vs. 7.35% and 11.77% vs. 15.89%). In total, Energy, Utilities, and Real Estate also make up 10.08% less of the fund’s holdings compared to SDY (14.58% vs. 24.66%).

Holdings

IWD - Holdings

IWD Holdings Weight
Berkshire Hathaway Inc Class B 2.58%
JPMorgan Chase & Co 2.25%
Johnson & Johnson 2.24%
UnitedHealth Group Inc 1.78%
Procter & Gamble Co 1.71%
The Walt Disney Co 1.5%
Bank of America Corp 1.43%
Comcast Corp Class A 1.33%
Exxon Mobil Corp 1.2%
Pfizer Inc 1.18%

IWD’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.58%, 2.25%, 2.24%, 1.78%, and 1.71%.

The Walt Disney Co (1.5%), Bank of America Corp (1.43%), and Comcast Corp Class A (1.33%) have a slightly smaller but still significant weight. Exxon Mobil Corp and Pfizer Inc are also represented in the IWD’s holdings at 1.2% and 1.18%.

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%.

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Risk Analysis

IWD SDY
Mean Return 1.03 1.07
R-squared 92.38 83.62
Std. Deviation 14.35 12.9
Alpha -3.23 -0.1
Beta 1.02 0.87
Sharpe Ratio 0.81 0.95
Treynor Ratio 11.06 13.94

The iShares Russell 1000 Value ETF (IWD) has a Standard Deviation of 14.35 with a Alpha of -3.23 and a Treynor Ratio of 11.06. Its Mean Return is 1.03 while IWD’s Beta is 1.02. Furthermore, the fund has a Sharpe Ratio of 0.81 and a R-squared of 92.38.

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

IWD’s Mean Return is 0.04 points lower than that of SDY and its R-squared is 8.76 points higher. With a Standard Deviation of 14.35, IWD is slightly more volatile than SDY. The Alpha and Beta of IWD are 3.13 points lower and 0.15 points higher than SDY’s Alpha and Beta.

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Performance

Annual Returns

IWD vs. SDY - Annual Returns

Year IWD SDY
2020 2.67% 1.78%
2019 26.34% 23.37%
2018 -8.4% -2.73%
2017 13.47% 15.84%
2016 17.09% 20.17%
2015 -3.95% -0.7%
2014 13.21% 13.8%
2013 32.18% 30.09%
2012 17.28% 11.51%
2011 0.21% 7.28%
2010 15.3% 16.41%

IWD had its best year in 2013 with an annual return of 32.18%. IWD’s worst year over the past decade yielded -8.4% and occurred in 2018. In most years the iShares Russell 1000 Value ETF provided moderate returns such as in 2014, 2017, and 2010 where annual returns amounted to 13.21%, 13.47%, and 15.3% 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

IWD vs. SDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWD $10,000 $30,746 11.40%
SDY $10,000 $34,806 12.44%

A $10,000 investment in IWD would have resulted in a final balance of $30,746. This is a profit of $20,746 over 11 years and amounts to a compound annual growth rate (CAGR) of 11.40%.

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%.

IWD’s CAGR is 1.04 percentage points lower than that of SDY and as a result, would have yielded $4,060 less on a $10,000 investment. Thus, IWD performed worse than SDY by 1.04% annually.


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