MDY vs. IWP: What’s The Difference?

The SPDR S&P MIDCAP 400 ETF Trust (MDY) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between MDY and IWP? And which fund is better?

The expense ratio of MDY is 0.01 percentage points lower than IWP’s (0.23% vs. 0.24%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided lower returns than IWP over the past 11 years.

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

Summary

MDY IWP
Name SPDR S&P MIDCAP 400 ETF Trust iShares Russell Mid-Cap Growth ETF
Category Mid-Cap Blend Mid-Cap Growth
Issuer SPDR State Street Global Advisors iShares
AUM 21.31B 15.7B
Avg. Return 13.29% 16.75%
Div. Yield 0.94% 0.26%
Expense Ratio 0.23% 0.24%

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 iShares Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.

MDY’s dividend yield is 0.68% higher than that of IWP (0.94% vs. 0.26%). Also, MDY yielded on average 3.46% less per year over the past decade (13.29% vs. 16.75%). The expense ratio of MDY is 0.01 percentage points lower than IWP’s (0.23% vs. 0.24%).

Fund Composition

Industry Exposure

MDY vs. IWP - Industry Exposure

MDY IWP
Technology 14.74% 33.88%
Industrials 17.88% 14.09%
Energy 2.52% 1.51%
Communication Services 1.63% 6.32%
Utilities 2.84% 0.16%
Healthcare 11.17% 16.79%
Consumer Defensive 4.2% 2.32%
Real Estate 9.66% 2.46%
Financial Services 15.2% 4.52%
Consumer Cyclical 14.89% 16.09%
Basic Materials 5.27% 1.86%

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 iShares Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.

IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.

MDY is 3.79% more exposed to the Industrials sector than IWP (17.88% vs 14.09%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 10.68% higher and 1.20% lower respectively (15.2% vs. 4.52% and 14.89% vs. 16.09%). In total, Energy, Utilities, and Consumer Defensive also make up 5.57% more of the fund’s holdings compared to IWP (9.56% vs. 3.99%).

Holdings

MDY - Holdings

MDY Holdings Weight
Bio-Techne Corp 0.75%
Molina Healthcare Inc 0.63%
Cognex Corp 0.63%
Fair Isaac Corp 0.62%
XPO Logistics Inc 0.61%
SolarEdge Technologies Inc 0.61%
Signature Bank 0.6%
Graco Inc 0.55%
Camden Property Trust 0.55%
FactSet Research Systems Inc 0.54%

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%.

IWP - Holdings

IWP Holdings Weight
IDEXX Laboratories Inc 1.3%
DocuSign Inc 1.3%
Roku Inc Class A 1.29%
Match Group Inc 1.06%
Chipotle Mexican Grill Inc 1.06%
Pinterest Inc 1.05%
Veeva Systems Inc Class A 1.04%
Palantir Technologies Inc Ordinary Shares – Class A 1.04%
Lululemon Athletica Inc 1.01%
DexCom Inc 1.0%

IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.

Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.

Risk Analysis

MDY IWP
Mean Return 1.08 1.27
R-squared 86.66 87.01
Std. Deviation 16.83 16.05
Alpha -4.1 -1.03
Beta 1.15 1.1
Sharpe Ratio 0.73 0.91
Treynor Ratio 9.97 12.98

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

The iShares Russell Mid-Cap Growth ETF (IWP) has a Standard Deviation of 16.05 with a Mean Return of 1.27 and a Sharpe Ratio of 0.91. Its R-squared is 87.01 while IWP’s Alpha is -1.03. Furthermore, the fund has a Beta of 1.1 and a Treynor Ratio of 12.98.

MDY’s Mean Return is 0.19 points lower than that of IWP and its R-squared is 0.35 points lower. With a Standard Deviation of 16.83, MDY is slightly more volatile than IWP. The Alpha and Beta of MDY are 3.07 points lower and 0.05 points higher than IWP’s Alpha and Beta.

Performance

Annual Returns

MDY vs. IWP - Annual Returns

Year MDY IWP
2020 13.51% 35.29%
2019 25.86% 35.14%
2018 -11.28% -4.95%
2017 15.89% 24.98%
2016 20.33% 7.15%
2015 -2.4% -0.39%
2014 9.42% 11.68%
2013 33.08% 35.44%
2012 17.58% 15.62%
2011 -1.99% -1.82%
2010 26.17% 26.1%

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 IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.

Portfolio Growth

MDY vs. IWP - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MDY $10,000 $36,524 13.29%
IWP $10,000 $50,191 16.75%

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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.

MDY’s CAGR is 3.46 percentage points lower than that of IWP and as a result, would have yielded $13,667 less on a $10,000 investment. Thus, MDY performed worse than IWP by 3.46% annually.


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