MDY vs. MTUM: What’s The Difference?

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

The expense ratio of MDY is 0.08 percentage points higher than MTUM’s (0.23% vs. 0.15%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided lower returns than MTUM over the past 7 years.

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

Summary

MDY MTUM
Name SPDR S&P MIDCAP 400 ETF Trust iShares MSCI USA Momentum Factor ETF
Category Mid-Cap Blend Large Growth
Issuer SPDR State Street Global Advisors iShares
AUM 21.31B 14.53B
Avg. Return 13.29% 17.37%
Div. Yield 0.94% 0.44%
Expense Ratio 0.23% 0.15%

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 MSCI USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

MDY’s dividend yield is 0.50% higher than that of MTUM (0.94% vs. 0.44%). Also, MDY yielded on average 4.08% less per year over the past decade (13.29% vs. 17.37%). The expense ratio of MDY is 0.08 percentage points higher than MTUM’s (0.23% vs. 0.15%).

Fund Composition

Industry Exposure

MDY vs. MTUM - Industry Exposure

MDY MTUM
Technology 14.74% 15.24%
Industrials 17.88% 12.47%
Energy 2.52% 1.77%
Communication Services 1.63% 13.18%
Utilities 2.84% 0.19%
Healthcare 11.17% 6.41%
Consumer Defensive 4.2% 2.88%
Real Estate 9.66% 0.43%
Financial Services 15.2% 34.32%
Consumer Cyclical 14.89% 9.96%
Basic Materials 5.27% 3.15%

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 MSCI USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.

MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.

MDY is 5.41% more exposed to the Industrials sector than MTUM (17.88% vs 12.47%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 19.12% lower and 4.93% higher respectively (15.2% vs. 34.32% and 14.89% vs. 9.96%). In total, Energy, Utilities, and Consumer Defensive also make up 4.72% more of the fund’s holdings compared to MTUM (9.56% vs. 4.84%).

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%.

MTUM - Holdings

MTUM Holdings Weight
Tesla Inc 5.63%
The Walt Disney Co 4.39%
JPMorgan Chase & Co 4.35%
Berkshire Hathaway Inc Class B 4.34%
Bank of America Corp 3.81%
PayPal Holdings Inc 3.76%
Wells Fargo & Co 3.05%
Applied Materials Inc 3.05%
Moderna Inc 2.89%
Alphabet Inc Class C 2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

Risk Analysis

MDY MTUM
Mean Return 1.08 0
R-squared 86.66 0
Std. Deviation 16.83 0
Alpha -4.1 0
Beta 1.15 0
Sharpe Ratio 0.73 0
Treynor Ratio 9.97 0

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

The iShares MSCI USA Momentum Factor ETF (MTUM) has a Sharpe Ratio of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Standard Deviation is 0 while MTUM’s R-squared is 0. Furthermore, the fund has a Alpha of 0 and a Beta of 0.

MDY’s Mean Return is 1.08 points higher than that of MTUM and its R-squared is 86.66 points higher. With a Standard Deviation of 16.83, MDY is slightly more volatile than MTUM. The Alpha and Beta of MDY are 4.10 points lower and 1.15 points higher than MTUM’s Alpha and Beta.

Performance

Annual Returns

MDY vs. MTUM - Annual Returns

Year MDY MTUM
2020 13.51% 29.69%
2019 25.86% 27.57%
2018 -11.28% -1.77%
2017 15.89% 37.6%
2016 20.33% 4.89%
2015 -2.4% 9.12%
2014 9.42% 14.48%
2013 33.08% 0.0%
2012 17.58% 0.0%
2011 -1.99% 0.0%
2010 26.17% 0.0%

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 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

MDY vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MDY $10,000 $18,875 13.29%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in MDY would have resulted in a final balance of $18,875. This is a profit of $8,875 over 7 years and amounts to a compound annual growth rate (CAGR) of 13.29%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

MDY’s CAGR is 4.08 percentage points lower than that of MTUM and as a result, would have yielded $10,426 less on a $10,000 investment. Thus, MDY performed worse than MTUM by 4.08% annually.


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