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MDY vs. DFAC: What’s The Difference?

The SPDR S&P MIDCAP 400 ETF Trust (MDY) and the Dimensional U.S. Core Equity 2 ETF (DFAC) are both among the Top 100 ETFs. MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund and DFAC is a Dimensional Fund Advisors Large Blend fund. So, what’s the difference between MDY and DFAC? And which fund is better?

The expense ratio of MDY is 0.04 percentage points higher than DFAC’s (0.23% vs. 0.19%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided lower returns than DFAC over the past 11 years.

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

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Summary

MDYDFAC
NameSPDR S&P MIDCAP 400 ETF TrustDimensional U.S. Core Equity 2 ETF
CategoryMid-Cap BlendLarge Blend
IssuerSPDR State Street Global AdvisorsDimensional Fund Advisors
AUM21.31B13.53B
Avg. Return13.29%13.93%
Div. Yield0.94%1.0%
Expense Ratio0.23%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%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) is a Large Blend fund that is issued by Dimensional Fund Advisors. It currently has 13.53B total assets under management and has yielded an average annual return of 13.93% over the past 10 years. The fund has a dividend yield of 1.0% with an expense ratio of 0.19%.

MDY’s dividend yield is 0.06% lower than that of DFAC (0.94% vs. 1.0%). Also, MDY yielded on average 0.64% less per year over the past decade (13.29% vs. 13.93%). The expense ratio of MDY is 0.04 percentage points higher than DFAC’s (0.23% vs. 0.19%).

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Fund Composition

Industry Exposure

MDY vs. DFAC - Industry Exposure

MDYDFAC
Technology14.74%22.81%
Industrials17.88%14.13%
Energy2.52%2.67%
Communication Services1.63%7.63%
Utilities2.84%1.54%
Healthcare11.17%12.09%
Consumer Defensive4.2%5.94%
Real Estate9.66%0.37%
Financial Services15.2%16.17%
Consumer Cyclical14.89%13.09%
Basic Materials5.27%3.56%

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%.

The Dimensional U.S. Core Equity 2 ETF (DFAC) has the most exposure to the Technology sector at 22.81%. This is followed by Financial Services and Industrials at 16.17% and 14.13% respectively. Utilities (1.54%), Energy (2.67%), and Basic Materials (3.56%) only make up 7.77% of the fund’s total assets.

DFAC’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Healthcare, Consumer Cyclical, and Industrials stocks at 5.94%, 7.63%, 12.09%, 13.09%, and 14.13%.

MDY is 3.75% more exposed to the Industrials sector than DFAC (17.88% vs 14.13%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 0.97% lower and 1.80% higher respectively (15.2% vs. 16.17% and 14.89% vs. 13.09%). In total, Energy, Utilities, and Consumer Defensive also make up 0.59% less of the fund’s holdings compared to DFAC (9.56% vs. 10.15%).

Holdings

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%.

DFAC - Holdings

DFAC HoldingsWeight
Apple Inc4.7%
Microsoft Corp3.81%
Amazon.com Inc2.39%
Johnson & Johnson1.05%
Facebook Inc Class A1.05%
JPMorgan Chase & Co1.0%
Alphabet Inc Class C0.85%
Alphabet Inc Class A0.84%
Berkshire Hathaway Inc Class B0.75%
Visa Inc Class A0.74%

DFAC’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Johnson & Johnson, and Facebook Inc Class A at 4.7%, 3.81%, 2.39%, 1.05%, and 1.05%.

JPMorgan Chase & Co (1.0%), Alphabet Inc Class C (0.85%), and Alphabet Inc Class A (0.84%) have a slightly smaller but still significant weight. Berkshire Hathaway Inc Class B and Visa Inc Class A are also represented in the DFAC’s holdings at 0.75% and 0.74%.

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Risk Analysis

MDYDFAC
Mean Return1.081.19
R-squared86.6695.1
Std. Deviation16.8315.55
Alpha-4.1-2.75
Beta1.151.12
Sharpe Ratio0.730.88
Treynor Ratio9.9711.85

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

The Dimensional U.S. Core Equity 2 ETF (DFAC) has a Treynor Ratio of 11.85 with a Standard Deviation of 15.55 and a Mean Return of 1.19. Its Beta is 1.12 while DFAC’s Sharpe Ratio is 0.88. Furthermore, the fund has a R-squared of 95.1 and a Alpha of -2.75.

MDY’s Mean Return is 0.11 points lower than that of DFAC and its R-squared is 8.44 points lower. With a Standard Deviation of 16.83, MDY is slightly more volatile than DFAC. The Alpha and Beta of MDY are 1.35 points lower and 0.03 points higher than DFAC’s Alpha and Beta.

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Performance

Annual Returns

MDY vs. DFAC - Annual Returns

YearMDYDFAC
202013.51%15.8%
201925.86%29.54%
2018-11.28%-9.43%
201715.89%18.82%
201620.33%16.31%
2015-2.4%-2.53%
20149.42%9.56%
201333.08%37.55%
201217.58%17.93%
2011-1.99%-1.96%
201026.17%21.67%

MDY had its best year in 2013 with an annual return of 33.08%. MDY’s worst year over the past decade yielded -11.28% and occurred in 2018. In most years the SPDR S&P MIDCAP 400 ETF Trust provided moderate returns such as in 2020, 2017, and 2012 where annual returns amounted to 13.51%, 15.89%, and 17.58% respectively.

The year 2013 was the strongest year for DFAC, returning 37.55% on an annual basis. The poorest year for DFAC in the last ten years was 2018, with a yield of -9.43%. Most years the Dimensional U.S. Core Equity 2 ETF has given investors modest returns, such as in 2020, 2016, and 2012, when gains were 15.8%, 16.31%, and 17.93% respectively.

Portfolio Growth

MDY vs. DFAC - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
MDY$10,000$36,52413.29%
DFAC$10,000$38,79613.93%

A $10,000 investment in MDY would have resulted in a final balance of $36,524. This is a profit of $26,524 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.29%.

With a $10,000 investment in DFAC, the end total would have been $38,796. This equates to a $28,796 profit over 11 years and a compound annual growth rate (CAGR) of 13.93%.

MDY’s CAGR is 0.64 percentage points lower than that of DFAC and as a result, would have yielded $2,272 less on a $10,000 investment. Thus, MDY performed worse than DFAC by 0.64% annually.


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