SDY vs. MTUM: What’s The Difference?

The SPDR S&P Dividend ETF (SDY) and the iShares MSCI USA Momentum Factor ETF (MTUM) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and MTUM is a iShares Large Growth fund. So, what’s the difference between SDY and MTUM? And which fund is better?

The expense ratio of SDY is 0.20 percentage points higher than MTUM’s (0.35% vs. 0.15%). SDY also has a lower exposure to the financial services sector and a higher standard deviation. Overall, SDY has provided lower returns than MTUM over the past 7 years.

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

Summary

SDY MTUM
Name SPDR S&P Dividend ETF iShares MSCI USA Momentum Factor ETF
Category Large Value Large Growth
Issuer SPDR State Street Global Advisors iShares
AUM 19.67B 14.53B
Avg. Return 12.44% 17.37%
Div. Yield 2.65% 0.44%
Expense Ratio 0.35% 0.15%

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 USA Momentum Factor ETF (MTUM) is a Large Growth fund that is issued by iShares. It currently has 14.53B total assets under management and has yielded an average annual return of 17.37% over the past 10 years. The fund has a dividend yield of 0.44% with an expense ratio of 0.15%.

SDY’s dividend yield is 2.21% higher than that of MTUM (2.65% vs. 0.44%). Also, SDY yielded on average 4.93% less per year over the past decade (12.44% vs. 17.37%). The expense ratio of SDY is 0.20 percentage points higher than MTUM’s (0.35% vs. 0.15%).

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Fund Composition

Industry Exposure

SDY vs. MTUM - Industry Exposure

SDY MTUM
Technology 2.0% 15.24%
Industrials 15.89% 12.47%
Energy 5.95% 1.77%
Communication Services 4.64% 13.18%
Utilities 12.14% 0.19%
Healthcare 7.35% 6.41%
Consumer Defensive 14.01% 2.88%
Real Estate 6.57% 0.43%
Financial Services 16.32% 34.32%
Consumer Cyclical 8.68% 9.96%
Basic Materials 6.45% 3.15%

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 USA Momentum Factor ETF (MTUM) has the most exposure to the Financial Services sector at 34.32%. This is followed by Technology and Communication Services at 15.24% and 13.18% respectively. Real Estate (0.43%), Energy (1.77%), and Consumer Defensive (2.88%) only make up 5.08% of the fund’s total assets.

MTUM’s mid-section with moderate exposure is comprised of Basic Materials, Healthcare, Consumer Cyclical, Industrials, and Communication Services stocks at 3.15%, 6.41%, 9.96%, 12.47%, and 13.18%.

SDY is 18.00% less exposed to the Financial Services sector than MTUM (16.32% vs 34.32%). SDY’s exposure to Industrials and Consumer Defensive stocks is 3.42% higher and 11.13% higher respectively (15.89% vs. 12.47% and 14.01% vs. 2.88%). In total, Communication Services, Energy, and Basic Materials also make up 1.06% less of the fund’s holdings compared to MTUM (17.04% vs. 18.10%).

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%.

MTUM - Holdings

MTUM Holdings Weight
Tesla Inc 5.63%
The Walt Disney Co 4.39%
JPMorgan Chase & Co 4.35%
Berkshire Hathaway Inc Class B 4.34%
Bank of America Corp 3.81%
PayPal Holdings Inc 3.76%
Wells Fargo & Co 3.05%
Applied Materials Inc 3.05%
Moderna Inc 2.89%
Alphabet Inc Class C 2.84%

MTUM’s Top Holdings are Tesla Inc, The Walt Disney Co, JPMorgan Chase & Co, Berkshire Hathaway Inc Class B, and Bank of America Corp at 5.63%, 4.39%, 4.35%, 4.34%, and 3.81%.

PayPal Holdings Inc (3.76%), Wells Fargo & Co (3.05%), and Applied Materials Inc (3.05%) have a slightly smaller but still significant weight. Moderna Inc and Alphabet Inc Class C are also represented in the MTUM’s holdings at 2.89% and 2.84%.

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Risk Analysis

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

The iShares MSCI USA Momentum Factor ETF (MTUM) has a Standard Deviation of 0 with a Mean Return of 0 and a Treynor Ratio of 0. Its Beta is 0 while MTUM’s Alpha is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.

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

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Performance

Annual Returns

SDY vs. MTUM - Annual Returns

Year SDY MTUM
2020 1.78% 29.69%
2019 23.37% 27.57%
2018 -2.73% -1.77%
2017 15.84% 37.6%
2016 20.17% 4.89%
2015 -0.7% 9.12%
2014 13.8% 14.48%
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 2017 was the strongest year for MTUM, returning 37.6% on an annual basis. The poorest year for MTUM in the last ten years was 2018, with a yield of -1.77%. Most years the iShares MSCI USA Momentum Factor ETF has given investors modest returns, such as in 2010, 2016, and 2015, when gains were 0.0%, 4.89%, and 9.12% respectively.

Portfolio Growth

SDY vs. MTUM - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SDY $10,000 $19,213 12.44%
MTUM $10,000 $29,301 17.37%

A $10,000 investment in SDY would have resulted in a final balance of $19,213. This is a profit of $9,213 over 7 years and amounts to a compound annual growth rate (CAGR) of 12.44%.

With a $10,000 investment in MTUM, the end total would have been $29,301. This equates to a $19,301 profit over 7 years and a compound annual growth rate (CAGR) of 17.37%.

SDY’s CAGR is 4.93 percentage points lower than that of MTUM and as a result, would have yielded $10,088 less on a $10,000 investment. Thus, SDY performed worse than MTUM by 4.93% annually.


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