The SPDR S&P Dividend ETF (SDY) and the iShares Russell Mid-Cap Growth ETF (IWP) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and IWP is a iShares Mid-Cap Growth fund. So, what’s the difference between SDY and IWP? And which fund is better?
The expense ratio of SDY is 0.11 percentage points higher than IWP’s (0.35% vs. 0.24%). SDY also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SDY has provided lower returns than IWP over the past 11 years.
In this article, we’ll compare SDY vs. IWP. We’ll look at industry exposure and holdings, as well as at their annual returns and performance. Moreover, I’ll also discuss SDY’s and IWP’s risk metrics, fund composition, and portfolio growth and examine how these affect their overall returns.
Summary
| SDY | IWP | |
| Name | SPDR S&P Dividend ETF | iShares Russell Mid-Cap Growth ETF |
| Category | Large Value | Mid-Cap Growth |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 19.67B | 15.7B |
| Avg. Return | 12.44% | 16.75% |
| Div. Yield | 2.65% | 0.26% |
| Expense Ratio | 0.35% | 0.24% |
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 Russell Mid-Cap Growth ETF (IWP) is a Mid-Cap Growth fund that is issued by iShares. It currently has 15.7B total assets under management and has yielded an average annual return of 16.75% over the past 10 years. The fund has a dividend yield of 0.26% with an expense ratio of 0.24%.
SDY’s dividend yield is 2.39% higher than that of IWP (2.65% vs. 0.26%). Also, SDY yielded on average 4.31% less per year over the past decade (12.44% vs. 16.75%). The expense ratio of SDY is 0.11 percentage points higher than IWP’s (0.35% vs. 0.24%).
Fund Composition
Industry Exposure
| SDY | IWP | |
| Technology | 2.0% | 33.88% |
| Industrials | 15.89% | 14.09% |
| Energy | 5.95% | 1.51% |
| Communication Services | 4.64% | 6.32% |
| Utilities | 12.14% | 0.16% |
| Healthcare | 7.35% | 16.79% |
| Consumer Defensive | 14.01% | 2.32% |
| Real Estate | 6.57% | 2.46% |
| Financial Services | 16.32% | 4.52% |
| Consumer Cyclical | 8.68% | 16.09% |
| Basic Materials | 6.45% | 1.86% |
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 Russell Mid-Cap Growth ETF (IWP) has the most exposure to the Technology sector at 33.88%. This is followed by Healthcare and Consumer Cyclical at 16.79% and 16.09% respectively. Energy (1.51%), Basic Materials (1.86%), and Consumer Defensive (2.32%) only make up 5.69% of the fund’s total assets.
IWP’s mid-section with moderate exposure is comprised of Real Estate, Financial Services, Communication Services, Industrials, and Consumer Cyclical stocks at 2.46%, 4.52%, 6.32%, 14.09%, and 16.09%.
SDY is 11.80% more exposed to the Financial Services sector than IWP (16.32% vs 4.52%). SDY’s exposure to Industrials and Consumer Defensive stocks is 1.80% higher and 11.69% higher respectively (15.89% vs. 14.09% and 14.01% vs. 2.32%). In total, Communication Services, Energy, and Basic Materials also make up 7.35% more of the fund’s holdings compared to IWP (17.04% vs. 9.69%).
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%.
| IWP Holdings | Weight |
| IDEXX Laboratories Inc | 1.3% |
| DocuSign Inc | 1.3% |
| Roku Inc Class A | 1.29% |
| Match Group Inc | 1.06% |
| Chipotle Mexican Grill Inc | 1.06% |
| Pinterest Inc | 1.05% |
| Veeva Systems Inc Class A | 1.04% |
| Palantir Technologies Inc Ordinary Shares – Class A | 1.04% |
| Lululemon Athletica Inc | 1.01% |
| DexCom Inc | 1.0% |
IWP’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Roku Inc Class A, Match Group Inc, and Chipotle Mexican Grill Inc at 1.3%, 1.3%, 1.29%, 1.06%, and 1.06%.
Pinterest Inc (1.05%), Veeva Systems Inc Class A (1.04%), and Palantir Technologies Inc Ordinary Shares – Class A (1.04%) have a slightly smaller but still significant weight. Lululemon Athletica Inc and DexCom Inc are also represented in the IWP’s holdings at 1.01% and 1.0%.
Risk Analysis
| SDY | IWP | |
| Mean Return | 1.07 | 1.27 |
| R-squared | 83.62 | 87.01 |
| Std. Deviation | 12.9 | 16.05 |
| Alpha | -0.1 | -1.03 |
| Beta | 0.87 | 1.1 |
| Sharpe Ratio | 0.95 | 0.91 |
| Treynor Ratio | 13.94 | 12.98 |
The SPDR S&P Dividend ETF (SDY) has a R-squared of 83.62 with a Sharpe Ratio of 0.95 and a Standard Deviation of 12.9. Its Beta is 0.87 while SDY’s Alpha is -0.1. Furthermore, the fund has a Treynor Ratio of 13.94 and a Mean Return of 1.07.
The iShares Russell Mid-Cap Growth ETF (IWP) has a Sharpe Ratio of 0.91 with a Treynor Ratio of 12.98 and a Beta of 1.1. Its Standard Deviation is 16.05 while IWP’s R-squared is 87.01. Furthermore, the fund has a Alpha of -1.03 and a Mean Return of 1.27.
SDY’s Mean Return is 0.20 points lower than that of IWP and its R-squared is 3.39 points lower. With a Standard Deviation of 12.9, SDY is slightly less volatile than IWP. The Alpha and Beta of SDY are 0.93 points higher and 0.23 points lower than IWP’s Alpha and Beta.
Performance
Annual Returns
| Year | SDY | IWP |
| 2020 | 1.78% | 35.29% |
| 2019 | 23.37% | 35.14% |
| 2018 | -2.73% | -4.95% |
| 2017 | 15.84% | 24.98% |
| 2016 | 20.17% | 7.15% |
| 2015 | -0.7% | -0.39% |
| 2014 | 13.8% | 11.68% |
| 2013 | 30.09% | 35.44% |
| 2012 | 11.51% | 15.62% |
| 2011 | 7.28% | -1.82% |
| 2010 | 16.41% | 26.1% |
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 2013 was the strongest year for IWP, returning 35.44% on an annual basis. The poorest year for IWP in the last ten years was 2018, with a yield of -4.95%. Most years the iShares Russell Mid-Cap Growth ETF has given investors modest returns, such as in 2014, 2012, and 2017, when gains were 11.68%, 15.62%, and 24.98% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SDY | $10,000 | $34,806 | 12.44% |
| IWP | $10,000 | $50,191 | 16.75% |
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 IWP, the end total would have been $50,191. This equates to a $40,191 profit over 11 years and a compound annual growth rate (CAGR) of 16.75%.
SDY’s CAGR is 4.31 percentage points lower than that of IWP and as a result, would have yielded $15,385 less on a $10,000 investment. Thus, SDY performed worse than IWP by 4.31% annually.
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