MDY vs. VGK: What’s The Difference?

The SPDR S&P MIDCAP 400 ETF Trust (MDY) and the Vanguard FTSE Europe Index Fund ETF Shares (VGK) are both among the Top 100 ETFs. MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund and VGK is a Vanguard Europe Stock fund. So, what’s the difference between MDY and VGK? And which fund is better?

The expense ratio of MDY is 0.15 percentage points higher than VGK’s (0.23% vs. 0.08%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided higher returns than VGK over the past 11 years.

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

Summary

MDY VGK
Name SPDR S&P MIDCAP 400 ETF Trust Vanguard FTSE Europe Index Fund ETF Shares
Category Mid-Cap Blend Europe Stock
Issuer SPDR State Street Global Advisors Vanguard
AUM 21.31B 25.7B
Avg. Return 13.29% 6.68%
Div. Yield 0.94% 2.52%
Expense Ratio 0.23% 0.08%

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 Vanguard FTSE Europe Index Fund ETF Shares (VGK) is a Europe Stock fund that is issued by Vanguard. It currently has 25.7B total assets under management and has yielded an average annual return of 6.68% over the past 10 years. The fund has a dividend yield of 2.52% with an expense ratio of 0.08%.

MDY’s dividend yield is 1.58% lower than that of VGK (0.94% vs. 2.52%). Also, MDY yielded on average 6.61% more per year over the past decade (13.29% vs. 6.68%). The expense ratio of MDY is 0.15 percentage points higher than VGK’s (0.23% vs. 0.08%).

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Fund Composition

Industry Exposure

MDY vs. VGK - Industry Exposure

MDY VGK
Technology 14.74% 8.3%
Industrials 17.88% 15.58%
Energy 2.52% 4.3%
Communication Services 1.63% 5.09%
Utilities 2.84% 3.89%
Healthcare 11.17% 13.76%
Consumer Defensive 4.2% 11.39%
Real Estate 9.66% 2.57%
Financial Services 15.2% 15.85%
Consumer Cyclical 14.89% 11.6%
Basic Materials 5.27% 7.67%

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 Vanguard FTSE Europe Index Fund ETF Shares (VGK) has the most exposure to the Financial Services sector at 15.85%. This is followed by Industrials and Healthcare at 15.58% and 13.76% respectively. Utilities (3.89%), Energy (4.3%), and Communication Services (5.09%) only make up 13.28% of the fund’s total assets.

VGK’s mid-section with moderate exposure is comprised of Basic Materials, Technology, Consumer Defensive, Consumer Cyclical, and Healthcare stocks at 7.67%, 8.3%, 11.39%, 11.6%, and 13.76%.

MDY is 2.30% more exposed to the Industrials sector than VGK (17.88% vs 15.58%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 0.65% lower and 3.29% higher respectively (15.2% vs. 15.85% and 14.89% vs. 11.6%). In total, Energy, Utilities, and Consumer Defensive also make up 10.02% less of the fund’s holdings compared to VGK (9.56% vs. 19.58%).

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%.

VGK - Holdings

VGK Holdings Weight
Nestle SA 2.82%
ASML Holding NV 2.2%
Roche Holding AG 2.13%
LVMH Moet Hennessy Louis Vuitton SE 1.58%
Novartis AG 1.55%
AstraZeneca PLC 1.27%
SAP SE 1.25%
Unilever PLC 1.23%
Novo Nordisk A/S B 1.09%
Siemens AG 0.96%

VGK’s Top Holdings are Nestle SA, ASML Holding NV, Roche Holding AG, LVMH Moet Hennessy Louis Vuitton SE, and Novartis AG at 2.82%, 2.2%, 2.13%, 1.58%, and 1.55%.

AstraZeneca PLC (1.27%), SAP SE (1.25%), and Unilever PLC (1.23%) have a slightly smaller but still significant weight. Novo Nordisk A/S B and Siemens AG are also represented in the VGK’s holdings at 1.09% and 0.96%.

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Risk Analysis

MDY VGK
Mean Return 1.08 0.61
R-squared 86.66 92.76
Std. Deviation 16.83 16.65
Alpha -4.1 0.45
Beta 1.15 1.06
Sharpe Ratio 0.73 0.4
Treynor Ratio 9.97 5.12

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

The Vanguard FTSE Europe Index Fund ETF Shares (VGK) has a Treynor Ratio of 5.12 with a Sharpe Ratio of 0.4 and a R-squared of 92.76. Its Beta is 1.06 while VGK’s Standard Deviation is 16.65. Furthermore, the fund has a Alpha of 0.45 and a Mean Return of 0.61.

MDY’s Mean Return is 0.47 points higher than that of VGK and its R-squared is 6.10 points lower. With a Standard Deviation of 16.83, MDY is slightly more volatile than VGK. The Alpha and Beta of MDY are 4.55 points lower and 0.09 points higher than VGK’s Alpha and Beta.

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Performance

Annual Returns

MDY vs. VGK - Annual Returns

Year MDY VGK
2020 13.51% 6.5%
2019 25.86% 24.26%
2018 -11.28% -14.79%
2017 15.89% 27.06%
2016 20.33% -0.59%
2015 -2.4% -1.87%
2014 9.42% -6.56%
2013 33.08% 24.93%
2012 17.58% 21.01%
2011 -1.99% -11.49%
2010 26.17% 5.01%

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 VGK, returning 27.06% on an annual basis. The poorest year for VGK in the last ten years was 2018, with a yield of -14.79%. Most years the Vanguard FTSE Europe Index Fund ETF Shares has given investors modest returns, such as in 2016, 2010, and 2020, when gains were -0.59%, 5.01%, and 6.5% respectively.

Portfolio Growth

MDY vs. VGK - Portfolio Growth

Fund Initial Balance Final Balance CAGR
MDY $10,000 $36,524 13.29%
VGK $10,000 $18,350 6.68%

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 VGK, the end total would have been $18,350. This equates to a $8,350 profit over 11 years and a compound annual growth rate (CAGR) of 6.68%.

MDY’s CAGR is 6.61 percentage points higher than that of VGK and as a result, would have yielded $18,174 more on a $10,000 investment. Thus, MDY outperformed VGK by 6.61% annually.


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