The SPDR S&P Dividend ETF (SDY) and the iShares MSCI USA Value Factor ETF (VLUE) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and VLUE is a iShares Large Value fund. So, what’s the difference between SDY and VLUE? And which fund is better?
The expense ratio of SDY is 0.20 percentage points higher than VLUE’s (0.35% vs. 0.15%). SDY also has a higher exposure to the financial services sector and a higher standard deviation. Overall, SDY has provided higher returns than VLUE over the past 7 years.
In this article, we’ll compare SDY vs. VLUE. We’ll look at risk metrics and annual returns, as well as at their holdings and fund composition. Moreover, I’ll also discuss SDY’s and VLUE’s performance, portfolio growth, and industry exposure and examine how these affect their overall returns.
Summary
| SDY | VLUE | |
| Name | SPDR S&P Dividend ETF | iShares MSCI USA Value Factor ETF |
| Category | Large Value | Large Value |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 19.67B | 15.95B |
| Avg. Return | 12.44% | 8.91% |
| Div. Yield | 2.65% | 1.89% |
| 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 Value Factor ETF (VLUE) is a Large Value fund that is issued by iShares. It currently has 15.95B total assets under management and has yielded an average annual return of 8.91% over the past 10 years. The fund has a dividend yield of 1.89% with an expense ratio of 0.15%.
SDY’s dividend yield is 0.76% higher than that of VLUE (2.65% vs. 1.89%). Also, SDY yielded on average 3.53% more per year over the past decade (12.44% vs. 8.91%). The expense ratio of SDY is 0.20 percentage points higher than VLUE’s (0.35% vs. 0.15%).
Fund Composition
Industry Exposure
| SDY | VLUE | |
| Technology | 2.0% | 26.89% |
| Industrials | 15.89% | 9.14% |
| Energy | 5.95% | 2.42% |
| Communication Services | 4.64% | 10.39% |
| Utilities | 12.14% | 2.68% |
| Healthcare | 7.35% | 14.31% |
| Consumer Defensive | 14.01% | 7.22% |
| Real Estate | 6.57% | 3.19% |
| Financial Services | 16.32% | 10.96% |
| Consumer Cyclical | 8.68% | 10.66% |
| Basic Materials | 6.45% | 2.14% |
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 Value Factor ETF (VLUE) has the most exposure to the Technology sector at 26.89%. This is followed by Healthcare and Financial Services at 14.31% and 10.96% respectively. Energy (2.42%), Utilities (2.68%), and Real Estate (3.19%) only make up 8.29% of the fund’s total assets.
VLUE’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Financial Services stocks at 7.22%, 9.14%, 10.39%, 10.66%, and 10.96%.
SDY is 5.36% more exposed to the Financial Services sector than VLUE (16.32% vs 10.96%). SDY’s exposure to Industrials and Consumer Defensive stocks is 6.75% higher and 6.79% higher respectively (15.89% vs. 9.14% and 14.01% vs. 7.22%). In total, Communication Services, Energy, and Basic Materials also make up 2.09% more of the fund’s holdings compared to VLUE (17.04% vs. 14.95%).
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%.
| VLUE Holdings | Weight |
| AT&T Inc | 7.13% |
| Intel Corp | 6.14% |
| General Motors Co | 3.19% |
| Micron Technology Inc | 3.14% |
| Cisco Systems Inc | 3.05% |
| International Business Machines Corp | 2.76% |
| Target Corp | 2.38% |
| Citigroup Inc | 2.32% |
| Ford Motor Co | 2.23% |
| Pfizer Inc | 2.17% |
VLUE’s Top Holdings are AT&T Inc, Intel Corp, General Motors Co, Micron Technology Inc, and Cisco Systems Inc at 7.13%, 6.14%, 3.19%, 3.14%, and 3.05%.
International Business Machines Corp (2.76%), Target Corp (2.38%), and Citigroup Inc (2.32%) have a slightly smaller but still significant weight. Ford Motor Co and Pfizer Inc are also represented in the VLUE’s holdings at 2.23% and 2.17%.
Risk Analysis
| SDY | VLUE | |
| 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 Sharpe Ratio of 0.95 and a Standard Deviation of 12.9. Its Mean Return is 1.07 while SDY’s R-squared is 83.62. Furthermore, the fund has a Treynor Ratio of 13.94 and a Beta of 0.87.
The iShares MSCI USA Value Factor ETF (VLUE) has a Standard Deviation of 0 with a Alpha of 0 and a R-squared of 0. Its Sharpe Ratio is 0 while VLUE’s Mean Return is 0. Furthermore, the fund has a Treynor Ratio of 0 and a Beta of 0.
SDY’s Mean Return is 1.07 points higher than that of VLUE and its R-squared is 83.62 points higher. With a Standard Deviation of 12.9, SDY is slightly more volatile than VLUE. The Alpha and Beta of SDY are 0.10 points lower and 0.87 points higher than VLUE’s Alpha and Beta.
Performance
Annual Returns
| Year | SDY | VLUE |
| 2020 | 1.78% | -0.32% |
| 2019 | 23.37% | 27.47% |
| 2018 | -2.73% | -11.18% |
| 2017 | 15.84% | 21.97% |
| 2016 | 20.17% | 15.68% |
| 2015 | -0.7% | -3.54% |
| 2014 | 13.8% | 12.29% |
| 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 VLUE, returning 27.47% on an annual basis. The poorest year for VLUE in the last ten years was 2018, with a yield of -11.18%. Most years the iShares MSCI USA Value Factor ETF has given investors modest returns, such as in 2012, 2011, and 2010, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| SDY | $10,000 | $19,213 | 12.44% |
| VLUE | $10,000 | $17,247 | 8.91% |
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 VLUE, the end total would have been $17,247. This equates to a $7,247 profit over 7 years and a compound annual growth rate (CAGR) of 8.91%.
SDY’s CAGR is 3.53 percentage points higher than that of VLUE and as a result, would have yielded $1,966 more on a $10,000 investment. Thus, SDY outperformed VLUE by 3.53% annually.
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