The SPDR S&P 500 ETF Trust (SPY) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between SPY and MDY? And which fund is better?

The expense ratio of SPY is 0.14 percentage points lower than MDY’s (0.09% vs. 0.23%). SPY also has a higher exposure to the technology sector and a lower standard deviation. Overall, SPY has provided higher returns than MDY over the past ten years.

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

Summary

SPYMDY
NameSPDR S&P 500 ETF TrustSPDR S&P MIDCAP 400 ETF Trust
CategoryLarge BlendMid-Cap Blend
IssuerSPDR State Street Global AdvisorsSPDR State Street Global Advisors
AUM374.03B21.31B
Avg. Return14.41%13.29%
Div. Yield1.3%0.94%
Expense Ratio0.09%0.23%

The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors. It currently has 374.03B total assets under management and has yielded an average annual return of 14.41% over the past 10 years. The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) is a Mid-Cap Blend fund that is issued by SPDR State Street Global Advisors. It currently has 21.31B total assets under management and has yielded an average annual return of 13.29% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.23%.

SPY’s dividend yield is 0.36% higher than that of MDY (1.3% vs. 0.94%). Also, SPY yielded on average 1.12% more per year over the past decade (14.41% vs. 13.29%). The expense ratio of SPY is 0.14 percentage points lower than MDY’s (0.09% vs. 0.23%).

Fund Composition

Industry Exposure

SPY vs. MDY - Industry Exposure

SPYMDY
Technology24.22%14.74%
Industrials8.86%17.88%
Energy2.86%2.52%
Communication Services11.14%1.63%
Utilities2.45%2.84%
Healthcare13.09%11.17%
Consumer Defensive6.32%4.2%
Real Estate2.57%9.66%
Financial Services14.23%15.2%
Consumer Cyclical12.0%14.89%
Basic Materials2.27%5.27%

The SPDR S&P 500 ETF Trust (SPY) has the most exposure to the Technology sector at 24.22%. This is followed by Financial Services and Healthcare at 14.23% and 13.09% respectively. Utilities (2.45%), Real Estate (2.57%), and Energy (2.86%) only make up 7.88% of the fund’s total assets.

SPY’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.0%, and 13.09%.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has the most exposure to the Industrials sector at 17.88%. This is followed by Financial Services and Consumer Cyclical at 15.2% and 14.89% respectively. Energy (2.52%), Utilities (2.84%), and Consumer Defensive (4.2%) only make up 9.56% of the fund’s total assets.

MDY’s mid-section with moderate exposure is comprised of Basic Materials, Real Estate, Healthcare, Technology, and Consumer Cyclical stocks at 5.27%, 9.66%, 11.17%, 14.74%, and 14.89%.

SPY is 9.48% more exposed to the Technology sector than MDY (24.22% vs 14.74%). SPY’s exposure to Financial Services and Healthcare stocks is 0.97% lower and 1.92% higher respectively (14.23% vs. 15.2% and 13.09% vs. 11.17%). In total, Utilities, Real Estate, and Energy also make up 7.14% less of the fund’s holdings compared to MDY (7.88% vs. 15.02%).

Holdings

SPY - Holdings

SPY HoldingsWeight
Apple Inc5.9%
Microsoft Corp5.6%
Amazon.com Inc4.05%
Facebook Inc A2.29%
Alphabet Inc A2.02%
Alphabet Inc Class C1.96%
Berkshire Hathaway Inc Class B1.45%
Tesla Inc1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.29%

SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.

MDY - Holdings

MDY HoldingsWeight
Bio-Techne Corp0.75%
Molina Healthcare Inc0.63%
Cognex Corp0.63%
Fair Isaac Corp0.62%
XPO Logistics Inc0.61%
SolarEdge Technologies Inc0.61%
Signature Bank0.6%
Graco Inc0.55%
Camden Property Trust0.55%
FactSet Research Systems Inc0.54%

MDY’s Top Holdings are Bio-Techne Corp, Molina Healthcare Inc, Cognex Corp, Fair Isaac Corp, and XPO Logistics Inc at 0.75%, 0.63%, 0.63%, 0.62%, and 0.61%.

SolarEdge Technologies Inc (0.61%), Signature Bank (0.6%), and Graco Inc (0.55%) have a slightly smaller but still significant weight. Camden Property Trust and FactSet Research Systems Inc are also represented in the MDY’s holdings at 0.55% and 0.54%.

Risk Analysis

SPYMDY
Mean Return1.231.08
R-squared10086.66
Std. Deviation13.5616.83
Alpha-0.09-4.1
Beta11.15
Sharpe Ratio1.040.73
Treynor Ratio14.129.97

The SPDR S&P 500 ETF Trust (SPY) has a Alpha of -0.09 with a Treynor Ratio of 14.12 and a Sharpe Ratio of 1.04. Its Mean Return is 1.23 while SPY’s Standard Deviation is 13.56. Furthermore, the fund has a R-squared of 100 and a Beta of 1.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Sharpe Ratio of 0.73 with a Treynor Ratio of 9.97 and a Beta of 1.15. Its Alpha is -4.1 while MDY’s Standard Deviation is 16.83. Furthermore, the fund has a R-squared of 86.66 and a Mean Return of 1.08.

SPY’s Mean Return is 0.15 points higher than that of MDY and its R-squared is 13.34 points higher. With a Standard Deviation of 13.56, SPY is slightly less volatile than MDY. The Alpha and Beta of SPY are 4.01 points higher and 0.15 points lower than MDY’s Alpha and Beta.

Performance

Annual Returns

SPY vs. MDY - Annual Returns

YearSPYMDY
202018.25%13.51%
201931.29%25.86%
2018-4.45%-11.28%
201721.69%15.89%
201611.8%20.33%
20151.34%-2.4%
201413.53%9.42%
201332.21%33.08%
201215.84%17.58%
20112.06%-1.99%
201014.93%26.17%

SPY had its best year in 2013 with an annual return of 32.21%. SPY’s worst year over the past decade yielded -4.45% and occurred in 2018. In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% respectively.

The year 2013 was the strongest year for MDY, returning 33.08% on an annual basis. The poorest year for MDY in the last ten years was 2018, with a yield of -11.28%. Most years the SPDR S&P MIDCAP 400 ETF Trust has given investors modest returns, such as in 2020, 2017, and 2012, when gains were 13.51%, 15.89%, and 17.58% respectively.

Portfolio Growth

SPY vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SPY$10,000$41,71214.41%
MDY$10,000$36,52413.29%

A $10,000 investment in SPY would have resulted in a final balance of $41,712. This is a profit of $31,712 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.41%.

With a $10,000 investment in MDY, the end total would have been $36,524. This equates to a $26,524 profit over 11 years and a compound annual growth rate (CAGR) of 13.29%.

SPY’s CAGR is 1.12 percentage points higher than that of MDY and as a result, would have yielded $5,188 more on a $10,000 investment. Thus, SPY outperformed MDY by 1.12% annually.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *