IWF vs. SDY: What’s The Difference?

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

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

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

Summary

IWF SDY
Name iShares Russell 1000 Growth ETF SPDR S&P Dividend ETF
Category Large Growth Large Value
Issuer iShares SPDR State Street Global Advisors
AUM 72.16B 19.67B
Avg. Return 17.72% 12.44%
Div. Yield 0.52% 2.65%
Expense Ratio 0.19% 0.35%

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 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%.

IWF’s dividend yield is 2.13% lower than that of SDY (0.52% vs. 2.65%). Also, IWF yielded on average 5.29% more per year over the past decade (17.72% vs. 12.44%). The expense ratio of IWF is 0.16 percentage points lower than SDY’s (0.19% vs. 0.35%).

Fund Composition

Industry Exposure

IWF vs. SDY - Industry Exposure

IWF SDY
Technology 39.29% 2.0%
Industrials 6.19% 15.89%
Energy 0.28% 5.95%
Communication Services 12.82% 4.64%
Utilities 0.03% 12.14%
Healthcare 9.23% 7.35%
Consumer Defensive 4.31% 14.01%
Real Estate 1.85% 6.57%
Financial Services 7.36% 16.32%
Consumer Cyclical 17.62% 8.68%
Basic Materials 1.01% 6.45%

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 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%.

IWF is 37.29% more exposed to the Technology sector than SDY (39.29% vs 2.0%). IWF’s exposure to Consumer Cyclical and Communication Services stocks is 8.94% higher and 8.18% higher respectively (17.62% vs. 8.68% and 12.82% vs. 4.64%). In total, Energy, Basic Materials, and Real Estate also make up 15.83% less of the fund’s holdings compared to SDY (3.14% vs. 18.97%).

Holdings

IWF - Holdings

IWF Holdings Weight
Apple Inc 10.51%
Microsoft Corp 9.85%
Amazon.com Inc 6.63%
Facebook Inc Class A 3.91%
Alphabet Inc Class A 3.2%
Alphabet Inc Class C 3.03%
Tesla Inc 2.45%
NVIDIA Corp 2.14%
Visa Inc Class A 1.91%
The Home Depot Inc 1.62%

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%.

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

IWF SDY
Mean Return 1.48 1.07
R-squared 92.93 83.62
Std. Deviation 14.42 12.9
Alpha 2.16 -0.1
Beta 1.03 0.87
Sharpe Ratio 1.19 0.95
Treynor Ratio 17.1 13.94

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

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

IWF’s Mean Return is 0.41 points higher than that of SDY and its R-squared is 9.31 points higher. With a Standard Deviation of 14.42, IWF is slightly more volatile than SDY. The Alpha and Beta of IWF are 2.26 points higher and 0.16 points higher than SDY’s Alpha and Beta.

Performance

Annual Returns

IWF vs. SDY - Annual Returns

Year IWF SDY
2020 38.21% 1.78%
2019 36.08% 23.37%
2018 -1.68% -2.73%
2017 29.96% 15.84%
2016 6.92% 20.17%
2015 5.48% -0.7%
2014 12.84% 13.8%
2013 33.19% 30.09%
2012 15.03% 11.51%
2011 2.47% 7.28%
2010 16.47% 16.41%

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 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

IWF vs. SDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IWF $10,000 $55,920 17.72%
SDY $10,000 $34,806 12.44%

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 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%.

IWF’s CAGR is 5.29 percentage points higher than that of SDY and as a result, would have yielded $21,114 more on a $10,000 investment. Thus, IWF outperformed SDY by 5.29% annually.


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