MDY vs. SDY: What’s The Difference?

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

The expense ratio of MDY is 0.12 percentage points lower than SDY’s (0.23% vs. 0.35%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided higher returns than SDY over the past 11 years.

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

Summary

MDY SDY
Name SPDR S&P MIDCAP 400 ETF Trust SPDR S&P Dividend ETF
Category Mid-Cap Blend Large Value
Issuer SPDR State Street Global Advisors SPDR State Street Global Advisors
AUM 21.31B 19.67B
Avg. Return 13.29% 12.44%
Div. Yield 0.94% 2.65%
Expense Ratio 0.23% 0.35%

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 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%.

MDY’s dividend yield is 1.71% lower than that of SDY (0.94% vs. 2.65%). Also, MDY yielded on average 0.85% more per year over the past decade (13.29% vs. 12.44%). The expense ratio of MDY is 0.12 percentage points lower than SDY’s (0.23% vs. 0.35%).

Fund Composition

Industry Exposure

MDY vs. SDY - Industry Exposure

MDY SDY
Technology 14.74% 2.0%
Industrials 17.88% 15.89%
Energy 2.52% 5.95%
Communication Services 1.63% 4.64%
Utilities 2.84% 12.14%
Healthcare 11.17% 7.35%
Consumer Defensive 4.2% 14.01%
Real Estate 9.66% 6.57%
Financial Services 15.2% 16.32%
Consumer Cyclical 14.89% 8.68%
Basic Materials 5.27% 6.45%

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 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%.

MDY is 1.99% more exposed to the Industrials sector than SDY (17.88% vs 15.89%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 1.12% lower and 6.21% higher respectively (15.2% vs. 16.32% and 14.89% vs. 8.68%). In total, Energy, Utilities, and Consumer Defensive also make up 22.54% less of the fund’s holdings compared to SDY (9.56% vs. 32.10%).

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%.

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

MDY SDY
Mean Return 1.08 1.07
R-squared 86.66 83.62
Std. Deviation 16.83 12.9
Alpha -4.1 -0.1
Beta 1.15 0.87
Sharpe Ratio 0.73 0.95
Treynor Ratio 9.97 13.94

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

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

MDY’s Mean Return is 0.01 points higher than that of SDY and its R-squared is 3.04 points higher. With a Standard Deviation of 16.83, MDY is slightly more volatile than SDY. The Alpha and Beta of MDY are 4.00 points lower and 0.28 points higher than SDY’s Alpha and Beta.

Performance

Annual Returns

MDY vs. SDY - Annual Returns

Year MDY SDY
2020 13.51% 1.78%
2019 25.86% 23.37%
2018 -11.28% -2.73%
2017 15.89% 15.84%
2016 20.33% 20.17%
2015 -2.4% -0.7%
2014 9.42% 13.8%
2013 33.08% 30.09%
2012 17.58% 11.51%
2011 -1.99% 7.28%
2010 26.17% 16.41%

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 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

MDY vs. SDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MDY $10,000 $36,524 13.29%
SDY $10,000 $34,806 12.44%

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 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%.

MDY’s CAGR is 0.85 percentage points higher than that of SDY and as a result, would have yielded $1,718 more on a $10,000 investment. Thus, MDY outperformed SDY by 0.85% annually.


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