MDY vs. SCHA: What’s The Difference?

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

The expense ratio of MDY is 0.19 percentage points higher than SCHA’s (0.23% vs. 0.04%). MDY also has a higher exposure to the industrials sector and a lower standard deviation. Overall, MDY has provided higher returns than SCHA over the past 10 years.

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

Summary

MDY SCHA
Name SPDR S&P MIDCAP 400 ETF Trust Schwab U.S. Small-Cap ETF
Category Mid-Cap Blend Small Blend
Issuer SPDR State Street Global Advisors Schwab ETFs
AUM 21.31B 16.51B
Avg. Return 13.29% 12.62%
Div. Yield 0.94% 0.98%
Expense Ratio 0.23% 0.04%

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 Schwab U.S. Small-Cap ETF (SCHA) is a Small Blend fund that is issued by Schwab ETFs. It currently has 16.51B total assets under management and has yielded an average annual return of 12.62% over the past 10 years. The fund has a dividend yield of 0.98% with an expense ratio of 0.04%.

MDY’s dividend yield is 0.04% lower than that of SCHA (0.94% vs. 0.98%). Also, MDY yielded on average 0.67% more per year over the past decade (13.29% vs. 12.62%). The expense ratio of MDY is 0.19 percentage points higher than SCHA’s (0.23% vs. 0.04%).

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Fund Composition

Industry Exposure

MDY vs. SCHA - Industry Exposure

MDY SCHA
Technology 14.74% 14.91%
Industrials 17.88% 15.37%
Energy 2.52% 3.35%
Communication Services 1.63% 3.5%
Utilities 2.84% 1.83%
Healthcare 11.17% 16.5%
Consumer Defensive 4.2% 3.75%
Real Estate 9.66% 7.83%
Financial Services 15.2% 14.49%
Consumer Cyclical 14.89% 14.48%
Basic Materials 5.27% 3.98%

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 Schwab U.S. Small-Cap ETF (SCHA) has the most exposure to the Healthcare sector at 16.5%. This is followed by Industrials and Technology at 15.37% and 14.91% respectively. Energy (3.35%), Communication Services (3.5%), and Consumer Defensive (3.75%) only make up 10.60% of the fund’s total assets.

SCHA’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Consumer Cyclical, Financial Services, and Technology stocks at 3.98%, 7.83%, 14.48%, 14.49%, and 14.91%.

MDY is 2.51% more exposed to the Industrials sector than SCHA (17.88% vs 15.37%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 0.71% higher and 0.41% higher respectively (15.2% vs. 14.49% and 14.89% vs. 14.48%). In total, Energy, Utilities, and Consumer Defensive also make up 0.63% more of the fund’s holdings compared to SCHA (9.56% vs. 8.93%).

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%.

SCHA - Holdings

SCHA Holdings Weight
AMC Entertainment Holdings Inc Class A 0.67%
Caesars Entertainment Inc 0.51%
Cloudflare Inc 0.48%
NovoCure Ltd 0.45%
Plug Power Inc 0.41%
10x Genomics Inc Ordinary Shares – Class A 0.34%
GameStop Corp Class A 0.28%
RH 0.27%
Penn National Gaming Inc 0.27%
Axon Enterprise Inc 0.27%

SCHA’s Top Holdings are AMC Entertainment Holdings Inc Class A, Caesars Entertainment Inc, Cloudflare Inc, NovoCure Ltd, and Plug Power Inc at 0.67%, 0.51%, 0.48%, 0.45%, and 0.41%.

10x Genomics Inc Ordinary Shares – Class A (0.34%), GameStop Corp Class A (0.28%), and RH (0.27%) have a slightly smaller but still significant weight. Penn National Gaming Inc and Axon Enterprise Inc are also represented in the SCHA’s holdings at 0.27% and 0.27%.

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Risk Analysis

MDY SCHA
Mean Return 1.08 1.14
R-squared 86.66 82.26
Std. Deviation 16.83 18.68
Alpha -4.1 -4.65
Beta 1.15 1.25
Sharpe Ratio 0.73 0.7
Treynor Ratio 9.97 9.62

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

The Schwab U.S. Small-Cap ETF (SCHA) has a Treynor Ratio of 9.62 with a Sharpe Ratio of 0.7 and a R-squared of 82.26. Its Alpha is -4.65 while SCHA’s Standard Deviation is 18.68. Furthermore, the fund has a Beta of 1.25 and a Mean Return of 1.14.

MDY’s Mean Return is 0.06 points lower than that of SCHA and its R-squared is 4.40 points higher. With a Standard Deviation of 16.83, MDY is slightly less volatile than SCHA. The Alpha and Beta of MDY are 0.55 points higher and 0.10 points lower than SCHA’s Alpha and Beta.

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Performance

Annual Returns

MDY vs. SCHA - Annual Returns

Year MDY SCHA
2020 13.51% 19.35%
2019 25.86% 26.54%
2018 -11.28% -11.75%
2017 15.89% 15.04%
2016 20.33% 19.88%
2015 -2.4% -4.24%
2014 9.42% 6.53%
2013 33.08% 39.59%
2012 17.58% 18.24%
2011 -1.99% -2.95%
2010 26.17% 28.31%

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 SCHA, returning 39.59% on an annual basis. The poorest year for SCHA in the last ten years was 2018, with a yield of -11.75%. Most years the Schwab U.S. Small-Cap ETF has given investors modest returns, such as in 2017, 2012, and 2020, when gains were 15.04%, 18.24%, and 19.35% respectively.

Portfolio Growth

MDY vs. SCHA - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MDY $10,000 $28,948 13.29%
SCHA $10,000 $30,035 12.62%

A $10,000 investment in MDY would have resulted in a final balance of $28,948. This is a profit of $18,948 over 10 years and amounts to a compound annual growth rate (CAGR) of 13.29%.

With a $10,000 investment in SCHA, the end total would have been $30,035. This equates to a $20,035 profit over 10 years and a compound annual growth rate (CAGR) of 12.62%.

MDY’s CAGR is 0.67 percentage points higher than that of SCHA and as a result, would have yielded $1,087 less on a $10,000 investment. Thus, MDY outperformed SCHA by 0.67% annually.


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