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MDY vs. VHT: What’s The Difference?

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

The expense ratio of MDY is 0.13 percentage points higher than VHT’s (0.23% vs. 0.1%). MDY also has a higher exposure to the industrials sector and a higher standard deviation. Overall, MDY has provided lower returns than VHT over the past 11 years.

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

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Summary

MDYVHT
NameSPDR S&P MIDCAP 400 ETF TrustVanguard Health Care Index Fund ETF Shares
CategoryMid-Cap BlendHealth
IssuerSPDR State Street Global AdvisorsVanguard
AUM21.31B17.94B
Avg. Return13.29%16.04%
Div. Yield0.94%1.15%
Expense Ratio0.23%0.1%

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 Health Care Index Fund ETF Shares (VHT) is a Health fund that is issued by Vanguard. It currently has 17.94B total assets under management and has yielded an average annual return of 16.04% over the past 10 years. The fund has a dividend yield of 1.15% with an expense ratio of 0.1%.

MDY’s dividend yield is 0.21% lower than that of VHT (0.94% vs. 1.15%). Also, MDY yielded on average 2.75% less per year over the past decade (13.29% vs. 16.04%). The expense ratio of MDY is 0.13 percentage points higher than VHT’s (0.23% vs. 0.1%).

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Fund Composition

Industry Exposure

MDY vs. VHT - Industry Exposure

MDYVHT
Technology14.74%0.05%
Industrials17.88%0.05%
Energy2.52%0.0%
Communication Services1.63%0.0%
Utilities2.84%0.0%
Healthcare11.17%99.57%
Consumer Defensive4.2%0.0%
Real Estate9.66%0.0%
Financial Services15.2%0.02%
Consumer Cyclical14.89%0.0%
Basic Materials5.27%0.31%

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 Health Care Index Fund ETF Shares (VHT) has the most exposure to the Healthcare sector at 99.57%. This is followed by Basic Materials and Technology at 0.31% and 0.05% respectively. Real Estate (0.0%), Consumer Defensive (0.0%), and Utilities (0.0%) only make up 0.00% of the fund’s total assets.

VHT’s mid-section with moderate exposure is comprised of Communication Services, Energy, Financial Services, Industrials, and Technology stocks at 0.0%, 0.0%, 0.02%, 0.05%, and 0.05%.

MDY is 17.83% more exposed to the Industrials sector than VHT (17.88% vs 0.05%). MDY’s exposure to Financial Services and Consumer Cyclical stocks is 15.18% higher and 14.89% higher respectively (15.2% vs. 0.02% and 14.89% vs. 0.0%). In total, Energy, Utilities, and Consumer Defensive also make up 9.56% more of the fund’s holdings compared to VHT (9.56% vs. 0.00%).

Holdings

MDY - Holdings

MDY HoldingsWeight
Bio-Techne Corp0.75%
Molina Healthcare Inc0.63%
Cognex Corp0.63%
Fair Isaac Corp0.62%
XPO Logistics Inc0.61%
SolarEdge Technologies Inc0.61%
Signature Bank0.6%
Graco Inc0.55%
Camden Property Trust0.55%
FactSet Research Systems Inc0.54%

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%.

VHT - Holdings

VHT HoldingsWeight
Johnson & Johnson7.34%
UnitedHealth Group Inc6.44%
Pfizer Inc3.7%
Abbott Laboratories3.48%
Thermo Fisher Scientific Inc3.37%
AbbVie Inc3.37%
Merck & Co Inc3.33%
Eli Lilly and Co3.17%
Danaher Corp2.91%
Medtronic PLC2.83%

VHT’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and Thermo Fisher Scientific Inc at 7.34%, 6.44%, 3.7%, 3.48%, and 3.37%.

AbbVie Inc (3.37%), Merck & Co Inc (3.33%), and Eli Lilly and Co (3.17%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the VHT’s holdings at 2.91% and 2.83%.

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Risk Analysis

MDYVHT
Mean Return1.081.33
R-squared86.6659.86
Std. Deviation16.8313.58
Alpha-4.17.99
Beta1.150.75
Sharpe Ratio0.731.13
Treynor Ratio9.9720.74

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

The Vanguard Health Care Index Fund ETF Shares (VHT) has a Treynor Ratio of 20.74 with a Sharpe Ratio of 1.13 and a Beta of 0.75. Its Standard Deviation is 13.58 while VHT’s Mean Return is 1.33. Furthermore, the fund has a R-squared of 59.86 and a Alpha of 7.99.

MDY’s Mean Return is 0.25 points lower than that of VHT and its R-squared is 26.80 points higher. With a Standard Deviation of 16.83, MDY is slightly more volatile than VHT. The Alpha and Beta of MDY are 12.09 points lower and 0.40 points higher than VHT’s Alpha and Beta.

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Performance

Annual Returns

MDY vs. VHT - Annual Returns

YearMDYVHT
202013.51%18.21%
201925.86%21.97%
2018-11.28%5.55%
201715.89%23.34%
201620.33%-3.33%
2015-2.4%7.22%
20149.42%25.38%
201333.08%42.67%
201217.58%19.1%
2011-1.99%10.57%
201026.17%5.75%

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 VHT, returning 42.67% on an annual basis. The poorest year for VHT in the last ten years was 2016, with a yield of -3.33%. Most years the Vanguard Health Care Index Fund ETF Shares has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 10.57%, 18.21%, and 19.1% respectively.

Portfolio Growth

MDY vs. VHT - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
MDY$10,000$36,52413.29%
VHT$10,000$48,46416.04%

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 VHT, the end total would have been $48,464. This equates to a $38,464 profit over 11 years and a compound annual growth rate (CAGR) of 16.04%.

MDY’s CAGR is 2.75 percentage points lower than that of VHT and as a result, would have yielded $11,940 less on a $10,000 investment. Thus, MDY performed worse than VHT by 2.75% annually.


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