The SPDR S&P Dividend ETF (SDY) and the iShares MSCI ACWI ETF (ACWI) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and ACWI is a iShares N/A fund. So, what’s the difference between SDY and ACWI? And which fund is better?
The expense ratio of SDY is 0.03 percentage points higher than ACWI’s (0.35% vs. 0.32%). SDY also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SDY has provided higher returns than ACWI over the past 11 years.
In this article, we’ll compare SDY vs. ACWI. We’ll look at portfolio growth and holdings, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss SDY’s and ACWI’s annual returns, performance, and fund composition and examine how these affect their overall returns.
|Name||SPDR S&P Dividend ETF||iShares MSCI ACWI ETF|
|Issuer||SPDR State Street Global Advisors||iShares|
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%.
The iShares MSCI ACWI ETF (ACWI) is a N/A fund that is issued by iShares. It currently has 16.85B total assets under management and has yielded an average annual return of 10.21% over the past 10 years. The fund has a dividend yield of 1.39% with an expense ratio of 0.32%.
SDY’s dividend yield is 1.26% higher than that of ACWI (2.65% vs. 1.39%). Also, SDY yielded on average 2.22% more per year over the past decade (12.44% vs. 10.21%). The expense ratio of SDY is 0.03 percentage points higher than ACWI’s (0.35% vs. 0.32%).
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%.
The iShares MSCI ACWI ETF (ACWI) has the most exposure to the Technology sector at 20.41%. This is followed by Financial Services and Consumer Cyclical at 15.58% and 12.01% respectively. Real Estate (2.75%), Energy (3.48%), and Basic Materials (4.73%) only make up 10.96% of the fund’s total assets.
ACWI’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Healthcare, and Consumer Cyclical stocks at 7.15%, 9.65%, 9.87%, 11.74%, and 12.01%.
SDY is 0.74% more exposed to the Financial Services sector than ACWI (16.32% vs 15.58%). SDY’s exposure to Industrials and Consumer Defensive stocks is 6.24% higher and 6.86% higher respectively (15.89% vs. 9.65% and 14.01% vs. 7.15%). In total, Communication Services, Energy, and Basic Materials also make up 1.04% less of the fund’s holdings compared to ACWI (17.04% vs. 18.08%).
|Exxon Mobil Corp||2.81%|
|South Jersey Industries Inc||2.22%|
|International Business Machines Corp||2.0%|
|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%.
|Facebook Inc A||1.25%|
|Alphabet Inc Class C||1.12%|
|Alphabet Inc A||1.09%|
|Taiwan Semiconductor Manufacturing Co Ltd||0.79%|
|JPMorgan Chase & Co||0.71%|
ACWI’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc Class C at 3.44%, 2.91%, 2.21%, 1.25%, and 1.12%.
Alphabet Inc A (1.09%), Taiwan Semiconductor Manufacturing Co Ltd (0.79%), and Tesla Inc (0.78%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ACWI’s holdings at 0.74% and 0.71%.
The SPDR S&P Dividend ETF (SDY) has a Alpha of -0.1 with a Standard Deviation of 12.9 and a Sharpe Ratio of 0.95. Its Treynor Ratio is 13.94 while SDY’s Mean Return is 1.07. Furthermore, the fund has a Beta of 0.87 and a R-squared of 83.62.
The iShares MSCI ACWI ETF (ACWI) has a Beta of 1 with a Sharpe Ratio of 0.71 and a Standard Deviation of 14.05. Its Treynor Ratio is 9.45 while ACWI’s Mean Return is 0.89. Furthermore, the fund has a Alpha of 0.15 and a R-squared of 99.96.
SDY’s Mean Return is 0.18 points higher than that of ACWI and its R-squared is 16.34 points lower. With a Standard Deviation of 12.9, SDY is slightly less volatile than ACWI. The Alpha and Beta of SDY are 0.25 points lower and 0.13 points lower than ACWI’s Alpha and Beta.
SDY had its best year in 2013 with an annual return of 30.09%. SDY’s worst year over the past decade yielded -2.73% and occurred in 2018. In most years the SPDR S&P Dividend ETF provided moderate returns such as in 2012, 2014, and 2017 where annual returns amounted to 11.51%, 13.8%, and 15.84% respectively.
The year 2019 was the strongest year for ACWI, returning 26.7% on an annual basis. The poorest year for ACWI in the last ten years was 2018, with a yield of -9.15%. Most years the iShares MSCI ACWI ETF has given investors modest returns, such as in 2016, 2010, and 2012, when gains were 8.22%, 12.31%, and 15.99% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in SDY would have resulted in a final balance of $34,806. This is a profit of $24,806 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.44%.
With a $10,000 investment in ACWI, the end total would have been $27,241. This equates to a $17,241 profit over 11 years and a compound annual growth rate (CAGR) of 10.21%.
SDY’s CAGR is 2.22 percentage points higher than that of ACWI and as a result, would have yielded $7,565 more on a $10,000 investment. Thus, SDY outperformed ACWI by 2.22% annually.
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