The SPDR S&P Dividend ETF (SDY) and the iShares Core Total USD Bond Market ETF (IUSB) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and IUSB is a iShares N/A fund. So, what’s the difference between SDY and IUSB? And which fund is better?
The expense ratio of SDY is 0.29 percentage points higher than IUSB’s (0.35% vs. 0.06%). SDY also has a high exposure to the financial services sector while IUSB is mostly comprised of AAA bonds. Overall, SDY has provided higher returns than IUSB over the past 6 years.
In this article, we’ll compare SDY vs. IUSB. We’ll look at annual returns and holdings, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss SDY’s and IUSB’s portfolio growth, fund composition, and performance and examine how these affect their overall returns.
Summary
| SDY | IUSB | |
| Name | SPDR S&P Dividend ETF | iShares Core Total USD Bond Market ETF |
| Category | Large Value | N/A |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 19.67B | 14.49B |
| Avg. Return | 12.44% | 4.13% |
| Div. Yield | 2.65% | 2.1% |
| Expense Ratio | 0.35% | 0.06% |
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 Core Total USD Bond Market ETF (IUSB) is a N/A fund that is issued by iShares. It currently has 14.49B total assets under management and has yielded an average annual return of 4.13% over the past 10 years. The fund has a dividend yield of 2.1% with an expense ratio of 0.06%.
SDY’s dividend yield is 0.55% higher than that of IUSB (2.65% vs. 2.1%). Also, SDY yielded on average 8.31% more per year over the past decade (12.44% vs. 4.13%). The expense ratio of SDY is 0.29 percentage points higher than IUSB’s (0.35% vs. 0.06%).
Fund Composition
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%.
| IUSB Bond Sectors | Weight |
| AAA | 58.32% |
| BBB | 16.98% |
| A | 12.27% |
| BB | 4.33% |
| AA | 3.36% |
| B | 2.8% |
| Others | 1.01% |
| Below B | 0.92% |
| US Government | 0.0% |
IUSB’s Top Bond Sectors are ratings of AAA, BBB, A, BB, and AA at 58.32%, 16.98%, 12.27%, 4.33%, and 3.36%. The fund is less weighted towards B (2.8%), Others (1.01%), and Below B (0.92%) rated bonds.
Risk Analysis
| SDY | IUSB | |
| Mean Return | 1.07 | 0 |
| R-squared | 83.62 | 0 |
| Std. Deviation | 12.9 | 0 |
| Alpha | -0.1 | 0 |
| Beta | 0.87 | 0 |
| Sharpe Ratio | 0.95 | 0 |
| Treynor Ratio | 13.94 | 0 |
The SPDR S&P Dividend ETF (SDY) has a Sharpe Ratio of 0.95 with a R-squared of 83.62 and a Alpha of -0.1. Its Standard Deviation is 12.9 while SDY’s Treynor Ratio is 13.94. Furthermore, the fund has a Beta of 0.87 and a Mean Return of 1.07.
The iShares Core Total USD Bond Market ETF (IUSB) has a R-squared of 0 with a Beta of 0 and a Mean Return of 0. Its Treynor Ratio is 0 while IUSB’s Sharpe Ratio is 0. Furthermore, the fund has a Alpha of 0 and a Standard Deviation of 0.
SDY’s Mean Return is 1.07 points higher than that of IUSB and its R-squared is 83.62 points higher. With a Standard Deviation of 12.9, SDY is slightly more volatile than IUSB. The Alpha and Beta of SDY are 0.10 points lower and 0.87 points higher than IUSB’s Alpha and Beta.
Performance
Annual Returns
| Year | SDY | IUSB |
| 2020 | 1.78% | 7.59% |
| 2019 | 23.37% | 9.26% |
| 2018 | -2.73% | -0.38% |
| 2017 | 15.84% | 4.06% |
| 2016 | 20.17% | 3.78% |
| 2015 | -0.7% | 0.46% |
| 2014 | 13.8% | 0.0% |
| 2013 | 30.09% | 0.0% |
| 2012 | 11.51% | 0.0% |
| 2011 | 7.28% | 0.0% |
| 2010 | 16.41% | 0.0% |
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 IUSB, returning 9.26% on an annual basis. The poorest year for IUSB in the last ten years was 2018, with a yield of -0.38%. Most years the iShares Core Total USD Bond Market ETF has given investors modest returns, such as in 2011, 2010, and 2015, when gains were 0.0%, 0.0%, and 0.46% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SDY | $10,000 | $16,883 | 12.44% |
| IUSB | $10,000 | $12,704 | 4.13% |
A $10,000 investment in SDY would have resulted in a final balance of $16,883. This is a profit of $6,883 over 6 years and amounts to a compound annual growth rate (CAGR) of 12.44%.
With a $10,000 investment in IUSB, the end total would have been $12,704. This equates to a $2,704 profit over 6 years and a compound annual growth rate (CAGR) of 4.13%.
SDY’s CAGR is 8.31 percentage points higher than that of IUSB and as a result, would have yielded $4,179 more on a $10,000 investment. Thus, SDY outperformed IUSB by 8.31% annually.
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