The SPDR S&P 500 ETF Trust (SPY) and the Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) are both among the Top 100 ETFs. SPY is a SPDR State Street Global Advisors Large Blend fund and VIG is a Vanguard Large Blend fund. So, what’s the difference between SPY and VIG? And which fund is better?

The expense ratio of SPY is 0.03 percentage points higher than VIG’s (0.09% vs. 0.06%). SPY also has a higher exposure to the technology sector and a higher standard deviation. Overall, SPY has provided higher returns than VIG over the past ten years.

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

Summary

SPYVIG
NameSPDR S&P 500 ETF TrustVanguard Dividend Appreciation Index Fund ETF Shares
CategoryLarge BlendLarge Blend
IssuerSPDR State Street Global AdvisorsVanguard
AUM374.03B71.92B
Avg. Return14.41%13.35%
Div. Yield1.3%1.56%
Expense Ratio0.09%0.06%

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 Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) is a Large Blend fund that is issued by Vanguard. It currently has 71.92B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.56% with an expense ratio of 0.06%.

SPY’s dividend yield is 0.26% lower than that of VIG (1.3% vs. 1.56%). Also, SPY yielded on average 1.06% more per year over the past decade (14.41% vs. 13.35%). The expense ratio of SPY is 0.03 percentage points higher than VIG’s (0.09% vs. 0.06%).

Fund Composition

Industry Exposure

SPY vs. VIG - Industry Exposure

SPYVIG
Technology24.22%14.93%
Industrials8.86%17.23%
Energy2.86%0.0%
Communication Services11.14%2.86%
Utilities2.45%2.81%
Healthcare13.09%15.52%
Consumer Defensive6.32%15.32%
Real Estate2.57%0.0%
Financial Services14.23%17.18%
Consumer Cyclical12.0%10.47%
Basic Materials2.27%3.67%

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 Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has the most exposure to the Industrials sector at 17.23%. This is followed by Financial Services and Healthcare at 17.18% and 15.52% respectively. Energy (0.0%), Utilities (2.81%), and Communication Services (2.86%) only make up 5.67% of the fund’s total assets.

VIG’s mid-section with moderate exposure is comprised of Basic Materials, Consumer Cyclical, Technology, Consumer Defensive, and Healthcare stocks at 3.67%, 10.47%, 14.93%, 15.32%, and 15.52%.

SPY is 9.29% more exposed to the Technology sector than VIG (24.22% vs 14.93%). SPY’s exposure to Financial Services and Healthcare stocks is 2.95% lower and 2.43% lower respectively (14.23% vs. 17.18% and 13.09% vs. 15.52%). In total, Utilities, Real Estate, and Energy also make up 5.07% more of the fund’s holdings compared to VIG (7.88% vs. 2.81%).

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%.

VIG - Holdings

VIG HoldingsWeight
Microsoft Corp4.19%
JPMorgan Chase & Co3.8%
Johnson & Johnson3.67%
Walmart Inc3.38%
Visa Inc Class A3.22%
UnitedHealth Group Inc3.22%
The Home Depot Inc2.91%
Procter & Gamble Co2.82%
Comcast Corp Class A2.21%
Coca-Cola Co1.98%

VIG’s Top Holdings are Microsoft Corp, JPMorgan Chase & Co, Johnson & Johnson, Walmart Inc, and Visa Inc Class A at 4.19%, 3.8%, 3.67%, 3.38%, and 3.22%.

UnitedHealth Group Inc (3.22%), The Home Depot Inc (2.91%), and Procter & Gamble Co (2.82%) have a slightly smaller but still significant weight. Comcast Corp Class A and Coca-Cola Co are also represented in the VIG’s holdings at 2.21% and 1.98%.

Risk Analysis

SPYVIG
Mean Return1.231.09
R-squared10092.2
Std. Deviation13.5612.25
Alpha-0.090.12
Beta10.86
Sharpe Ratio1.041.01
Treynor Ratio14.1214.33

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

The Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) has a Beta of 0.86 with a Mean Return of 1.09 and a Sharpe Ratio of 1.01. Its Standard Deviation is 12.25 while VIG’s Treynor Ratio is 14.33. Furthermore, the fund has a Alpha of 0.12 and a R-squared of 92.2.

SPY’s Mean Return is 0.14 points higher than that of VIG and its R-squared is 7.80 points higher. With a Standard Deviation of 13.56, SPY is slightly more volatile than VIG. The Alpha and Beta of SPY are 0.21 points lower and 0.14 points higher than VIG’s Alpha and Beta.

Performance

Annual Returns

SPY vs. VIG - Annual Returns

YearSPYVIG
202018.25%15.46%
201931.29%29.71%
2018-4.45%-2.02%
201721.69%22.22%
201611.8%11.84%
20151.34%-1.95%
201413.53%10.06%
201332.21%28.99%
201215.84%11.61%
20112.06%6.21%
201014.93%14.67%

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 2019 was the strongest year for VIG, returning 29.71% on an annual basis. The poorest year for VIG in the last ten years was 2018, with a yield of -2.02%. Most years the Vanguard Dividend Appreciation Index Fund ETF Shares has given investors modest returns, such as in 2012, 2016, and 2010, when gains were 11.61%, 11.84%, and 14.67% respectively.

Portfolio Growth

SPY vs. VIG - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SPY$10,000$41,71214.41%
VIG$10,000$37,95113.35%

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 VIG, the end total would have been $37,951. This equates to a $27,951 profit over 11 years and a compound annual growth rate (CAGR) of 13.35%.

SPY’s CAGR is 1.06 percentage points higher than that of VIG and as a result, would have yielded $3,761 more on a $10,000 investment. Thus, SPY outperformed VIG by 1.06% annually.

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