SDY vs. JPST: What’s The Difference?

The SPDR S&P Dividend ETF (SDY) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between SDY and JPST? And which fund is better?

The expense ratio of SDY is 0.17 percentage points higher than JPST’s (0.35% vs. 0.18%). SDY also has a high exposure to the financial services sector while JPST is mostly comprised of A bonds. Overall, SDY has provided higher returns than JPST over the past 3 years.

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

Summary

SDY JPST
Name SPDR S&P Dividend ETF JPMorgan Ultra-Short Income ETF
Category Large Value Ultrashort Bond
Issuer SPDR State Street Global Advisors JPMorgan
AUM 19.67B 17.32B
Avg. Return 12.44% 2.57%
Div. Yield 2.65% 0.94%
Expense Ratio 0.35% 0.18%

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 JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

SDY’s dividend yield is 1.71% higher than that of JPST (2.65% vs. 0.94%). Also, SDY yielded on average 9.86% more per year over the past decade (12.44% vs. 2.57%). The expense ratio of SDY is 0.17 percentage points higher than JPST’s (0.35% vs. 0.18%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Holdings

SDY - 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%.

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

SDY JPST
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 Mean Return of 1.07 with a Alpha of -0.1 and a Standard Deviation of 12.9. Its Beta is 0.87 while SDY’s R-squared is 83.62. Furthermore, the fund has a Sharpe Ratio of 0.95 and a Treynor Ratio of 13.94.

The JPMorgan Ultra-Short Income ETF (JPST) has a Standard Deviation of 0 with a Mean Return of 0 and a Sharpe Ratio of 0. Its Beta is 0 while JPST’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Treynor Ratio of 0.

SDY’s Mean Return is 1.07 points higher than that of JPST and its R-squared is 83.62 points higher. With a Standard Deviation of 12.9, SDY is slightly more volatile than JPST. The Alpha and Beta of SDY are 0.10 points lower and 0.87 points higher than JPST’s Alpha and Beta.

BTW: Uncorrelated crypto assets such as Bitcoin can serve as a hedge and mitigate risk. I've allocated around 5% of my portfolio to crypto assets through Coinbase - the simplest and cheapest broker I've found! Click here to read more (link to Coinbase).

Performance

Annual Returns

SDY vs. JPST - Annual Returns

Year SDY JPST
2020 1.78% 2.17%
2019 23.37% 3.36%
2018 -2.73% 2.19%
2017 15.84% 0.0%
2016 20.17% 0.0%
2015 -0.7% 0.0%
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 JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

SDY vs. JPST - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SDY $10,000 $12,213 12.44%
JPST $10,000 $10,791 2.57%

A $10,000 investment in SDY would have resulted in a final balance of $12,213. This is a profit of $2,213 over 3 years and amounts to a compound annual growth rate (CAGR) of 12.44%.

With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.

SDY’s CAGR is 9.86 percentage points higher than that of JPST and as a result, would have yielded $1,422 more on a $10,000 investment. Thus, SDY outperformed JPST by 9.86% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

2) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

3) If you are interested in crypto, check out Coinbase. I've started allocating a small amount of assets to the growing crypto space and Coinbase has just been a breeze to use. Once you register, make sure to also open an Coinbase Pro account to buy crypto at the lowest fees on the market (just 0.1%!).

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply