The iShares Russell 1000 Growth ETF (IWF) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. IWF 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 IWF and MDY? And which fund is better?

The expense ratio of IWF is 0.04 percentage points lower than MDY’s (0.19% vs. 0.23%). IWF also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWF has provided higher returns than MDY over the past ten years.

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

Summary

IWFMDY
NameiShares Russell 1000 Growth ETFSPDR S&P MIDCAP 400 ETF Trust
CategoryLarge GrowthMid-Cap Blend
IssueriSharesSPDR State Street Global Advisors
AUM72.16B21.31B
Avg. Return17.72%13.29%
Div. Yield0.52%0.94%
Expense Ratio0.19%0.23%

The iShares Russell 1000 Growth ETF (IWF) is a Large Growth fund that is issued by iShares. It currently has 72.16B total assets under management and has yielded an average annual return of 17.72% over the past 10 years. The fund has a dividend yield of 0.52% with an expense ratio of 0.19%.

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%.

IWF’s dividend yield is 0.42% lower than that of MDY (0.52% vs. 0.94%). Also, IWF yielded on average 4.44% more per year over the past decade (17.72% vs. 13.29%). The expense ratio of IWF is 0.04 percentage points lower than MDY’s (0.19% vs. 0.23%).

Fund Composition

Industry Exposure

IWF vs. MDY - Industry Exposure

IWFMDY
Technology39.29%14.74%
Industrials6.19%17.88%
Energy0.28%2.52%
Communication Services12.82%1.63%
Utilities0.03%2.84%
Healthcare9.23%11.17%
Consumer Defensive4.31%4.2%
Real Estate1.85%9.66%
Financial Services7.36%15.2%
Consumer Cyclical17.62%14.89%
Basic Materials1.01%5.27%

The iShares Russell 1000 Growth ETF (IWF) has the most exposure to the Technology sector at 39.29%. This is followed by Consumer Cyclical and Communication Services at 17.62% and 12.82% respectively. Energy (0.28%), Basic Materials (1.01%), and Real Estate (1.85%) only make up 3.14% of the fund’s total assets.

IWF’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Financial Services, Healthcare, and Communication Services stocks at 4.31%, 6.19%, 7.36%, 9.23%, and 12.82%.

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%.

IWF is 24.55% more exposed to the Technology sector than MDY (39.29% vs 14.74%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 2.73% higher and 11.19% higher respectively (17.62% vs. 14.89% and 12.82% vs. 1.63%). In total, Energy, Basic Materials, and Real Estate also make up 14.31% less of the fund’s holdings compared to MDY (3.14% vs. 17.45%).

Holdings

IWF - Holdings

IWF HoldingsWeight
Apple Inc10.51%
Microsoft Corp9.85%
Amazon.com Inc6.63%
Facebook Inc Class A3.91%
Alphabet Inc Class A3.2%
Alphabet Inc Class C3.03%
Tesla Inc2.45%
NVIDIA Corp2.14%
Visa Inc Class A1.91%
The Home Depot Inc1.62%

IWF’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 10.51%, 9.85%, 6.63%, 3.91%, and 3.2%.

Alphabet Inc Class C (3.03%), Tesla Inc (2.45%), and NVIDIA Corp (2.14%) have a slightly smaller but still significant weight. Visa Inc Class A and The Home Depot Inc are also represented in the IWF’s holdings at 1.91% and 1.62%.

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%.

Risk Analysis

IWFMDY
Mean Return1.481.08
R-squared92.9386.66
Std. Deviation14.4216.83
Alpha2.16-4.1
Beta1.031.15
Sharpe Ratio1.190.73
Treynor Ratio17.19.97

The iShares Russell 1000 Growth ETF (IWF) has a Mean Return of 1.48 with a Sharpe Ratio of 1.19 and a Alpha of 2.16. Its Standard Deviation is 14.42 while IWF’s R-squared is 92.93. Furthermore, the fund has a Beta of 1.03 and a Treynor Ratio of 17.1.

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

IWF’s Mean Return is 0.40 points higher than that of MDY and its R-squared is 6.27 points higher. With a Standard Deviation of 14.42, IWF is slightly less volatile than MDY. The Alpha and Beta of IWF are 6.26 points higher and 0.12 points lower than MDY’s Alpha and Beta.

Performance

Annual Returns

IWF vs. MDY - Annual Returns

YearIWFMDY
202038.21%13.51%
201936.08%25.86%
2018-1.68%-11.28%
201729.96%15.89%
20166.92%20.33%
20155.48%-2.4%
201412.84%9.42%
201333.19%33.08%
201215.03%17.58%
20112.47%-1.99%
201016.47%26.17%

IWF had its best year in 2020 with an annual return of 38.21%. IWF’s worst year over the past decade yielded -1.68% and occurred in 2018. In most years the iShares Russell 1000 Growth ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 12.84%, 15.03%, and 16.47% 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

IWF vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWF$10,000$55,92017.72%
MDY$10,000$36,52413.29%

A $10,000 investment in IWF would have resulted in a final balance of $55,920. This is a profit of $45,920 over 11 years and amounts to a compound annual growth rate (CAGR) of 17.72%.

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%.

IWF’s CAGR is 4.44 percentage points higher than that of MDY and as a result, would have yielded $19,396 more on a $10,000 investment. Thus, IWF outperformed MDY by 4.44% annually.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *