SDY vs. VXF: What’s The Difference?

The SPDR S&P Dividend ETF (SDY) and the Vanguard Extended Market Index Fund ETF Shares (VXF) are both among the Top 100 ETFs. SDY is a SPDR State Street Global Advisors Large Value fund and VXF is a Vanguard Mid-Cap Growth fund. So, what’s the difference between SDY and VXF? And which fund is better?

The expense ratio of SDY is 0.29 percentage points higher than VXF’s (0.35% vs. 0.06%). SDY also has a higher exposure to the financial services sector and a lower standard deviation. Overall, SDY has provided lower returns than VXF over the past 11 years.

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

Summary

SDY VXF
Name SPDR S&P Dividend ETF Vanguard Extended Market Index Fund ETF Shares
Category Large Value Mid-Cap Growth
Issuer SPDR State Street Global Advisors Vanguard
AUM 19.67B 114.53B
Avg. Return 12.44% 15.47%
Div. Yield 2.65% 1.19%
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 Vanguard Extended Market Index Fund ETF Shares (VXF) is a Mid-Cap Growth fund that is issued by Vanguard. It currently has 114.53B total assets under management and has yielded an average annual return of 15.47% over the past 10 years. The fund has a dividend yield of 1.19% with an expense ratio of 0.06%.

SDY’s dividend yield is 1.46% higher than that of VXF (2.65% vs. 1.19%). Also, SDY yielded on average 3.03% less per year over the past decade (12.44% vs. 15.47%). The expense ratio of SDY is 0.29 percentage points higher than VXF’s (0.35% vs. 0.06%).

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Fund Composition

Industry Exposure

SDY vs. VXF - Industry Exposure

SDY VXF
Technology 2.0% 23.61%
Industrials 15.89% 11.31%
Energy 5.95% 2.46%
Communication Services 4.64% 7.29%
Utilities 12.14% 1.65%
Healthcare 7.35% 15.25%
Consumer Defensive 14.01% 3.09%
Real Estate 6.57% 8.16%
Financial Services 16.32% 12.56%
Consumer Cyclical 8.68% 11.35%
Basic Materials 6.45% 3.26%

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 Vanguard Extended Market Index Fund ETF Shares (VXF) has the most exposure to the Technology sector at 23.61%. This is followed by Healthcare and Financial Services at 15.25% and 12.56% respectively. Energy (2.46%), Consumer Defensive (3.09%), and Basic Materials (3.26%) only make up 8.81% of the fund’s total assets.

VXF’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Industrials, Consumer Cyclical, and Financial Services stocks at 7.29%, 8.16%, 11.31%, 11.35%, and 12.56%.

SDY is 3.76% more exposed to the Financial Services sector than VXF (16.32% vs 12.56%). SDY’s exposure to Industrials and Consumer Defensive stocks is 4.58% higher and 10.92% higher respectively (15.89% vs. 11.31% and 14.01% vs. 3.09%). In total, Communication Services, Energy, and Basic Materials also make up 4.03% more of the fund’s holdings compared to VXF (17.04% vs. 13.01%).

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%.

VXF - Holdings

VXF Holdings Weight
Square Inc A 1.2%
Zoom Video Communications Inc 1.04%
Uber Technologies Inc 0.93%
Moderna Inc 0.9%
Blackstone Group Inc 0.83%
Snap Inc Class A 0.8%
Twilio Inc A 0.73%
DocuSign Inc 0.68%
CrowdStrike Holdings Inc Class A 0.63%
Marvell Technology Inc 0.6%

VXF’s Top Holdings are Square Inc A, Zoom Video Communications Inc, Uber Technologies Inc, Moderna Inc, and Blackstone Group Inc at 1.2%, 1.04%, 0.93%, 0.9%, and 0.83%.

Snap Inc Class A (0.8%), Twilio Inc A (0.73%), and DocuSign Inc (0.68%) have a slightly smaller but still significant weight. CrowdStrike Holdings Inc Class A and Marvell Technology Inc are also represented in the VXF’s holdings at 0.63% and 0.6%.

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Risk Analysis

SDY VXF
Mean Return 1.07 1.24
R-squared 83.62 85.73
Std. Deviation 12.9 18.04
Alpha -0.1 -3.26
Beta 0.87 1.23
Sharpe Ratio 0.95 0.79
Treynor Ratio 13.94 10.92

The SPDR S&P Dividend ETF (SDY) has a Sharpe Ratio of 0.95 with a R-squared of 83.62 and a Mean Return of 1.07. Its Beta is 0.87 while SDY’s Treynor Ratio is 13.94. Furthermore, the fund has a Alpha of -0.1 and a Standard Deviation of 12.9.

The Vanguard Extended Market Index Fund ETF Shares (VXF) has a Alpha of -3.26 with a Sharpe Ratio of 0.79 and a R-squared of 85.73. Its Standard Deviation is 18.04 while VXF’s Mean Return is 1.24. Furthermore, the fund has a Beta of 1.23 and a Treynor Ratio of 10.92.

SDY’s Mean Return is 0.17 points lower than that of VXF and its R-squared is 2.11 points lower. With a Standard Deviation of 12.9, SDY is slightly less volatile than VXF. The Alpha and Beta of SDY are 3.16 points higher and 0.36 points lower than VXF’s Alpha and Beta.

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Performance

Annual Returns

SDY vs. VXF - Annual Returns

Year SDY VXF
2020 1.78% 32.19%
2019 23.37% 28.04%
2018 -2.73% -9.37%
2017 15.84% 18.1%
2016 20.17% 16.16%
2015 -0.7% -3.26%
2014 13.8% 7.55%
2013 30.09% 38.37%
2012 11.51% 18.48%
2011 7.28% -3.61%
2010 16.41% 27.55%

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 VXF, returning 38.37% on an annual basis. The poorest year for VXF in the last ten years was 2018, with a yield of -9.37%. Most years the Vanguard Extended Market Index Fund ETF Shares has given investors modest returns, such as in 2016, 2017, and 2012, when gains were 16.16%, 18.1%, and 18.48% respectively.

Portfolio Growth

SDY vs. VXF - Portfolio Growth

Fund Initial Balance Final Balance CAGR
SDY $10,000 $34,806 12.44%
VXF $10,000 $44,130 15.47%

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 VXF, the end total would have been $44,130. This equates to a $34,130 profit over 11 years and a compound annual growth rate (CAGR) of 15.47%.

SDY’s CAGR is 3.03 percentage points lower than that of VXF and as a result, would have yielded $9,324 less on a $10,000 investment. Thus, SDY performed worse than VXF by 3.03% annually.


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