Skip to content

USMV vs. SDY: What’s The Difference?

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

The expense ratio of USMV is 0.20 percentage points lower than SDY’s (0.15% vs. 0.35%). USMV also has a higher exposure to the technology sector and a lower standard deviation. Overall, USMV has provided higher returns than SDY over the past 8 years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

USMVSDY
NameiShares MSCI USA Min Vol Factor ETFSPDR S&P Dividend ETF
CategoryLarge BlendLarge Value
IssueriSharesSPDR State Street Global Advisors
AUM27.6B19.67B
Avg. Return13.89%12.44%
Div. Yield1.5%2.65%
Expense Ratio0.15%0.35%

The iShares MSCI USA Min Vol Factor ETF (USMV) is a Large Blend fund that is issued by iShares. It currently has 27.6B total assets under management and has yielded an average annual return of 13.89% over the past 10 years. The fund has a dividend yield of 1.5% with an expense ratio of 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%.

USMV’s dividend yield is 1.15% lower than that of SDY (1.5% vs. 2.65%). Also, USMV yielded on average 1.46% more per year over the past decade (13.89% vs. 12.44%). The expense ratio of USMV is 0.20 percentage points lower than SDY’s (0.15% vs. 0.35%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

USMV vs. SDY - Industry Exposure

USMVSDY
Technology20.53%2.0%
Industrials10.51%15.89%
Energy0.21%5.95%
Communication Services11.03%4.64%
Utilities6.93%12.14%
Healthcare18.42%7.35%
Consumer Defensive12.82%14.01%
Real Estate2.73%6.57%
Financial Services9.65%16.32%
Consumer Cyclical5.53%8.68%
Basic Materials1.65%6.45%

The iShares MSCI USA Min Vol Factor ETF (USMV) has the most exposure to the Technology sector at 20.53%. This is followed by Healthcare and Consumer Defensive at 18.42% and 12.82% respectively. Basic Materials (1.65%), Real Estate (2.73%), and Consumer Cyclical (5.53%) only make up 9.91% of the fund’s total assets.

USMV’s mid-section with moderate exposure is comprised of Utilities, Financial Services, Industrials, Communication Services, and Consumer Defensive stocks at 6.93%, 9.65%, 10.51%, 11.03%, and 12.82%.

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%.

USMV is 18.53% more exposed to the Technology sector than SDY (20.53% vs 2.0%). USMV’s exposure to Healthcare and Consumer Defensive stocks is 11.07% higher and 1.19% lower respectively (18.42% vs. 7.35% and 12.82% vs. 14.01%). In total, Basic Materials, Real Estate, and Consumer Cyclical also make up 11.79% less of the fund’s holdings compared to SDY (9.91% vs. 21.70%).

Holdings

USMV - Holdings

USMV HoldingsWeight
Eli Lilly and Co1.64%
Microsoft Corp1.62%
T-Mobile US Inc1.51%
Accenture PLC Class A1.51%
Visa Inc Class A1.49%
Waste Management Inc1.45%
Adobe Inc1.45%
The Kroger Co1.44%
Johnson & Johnson1.42%
Gilead Sciences Inc1.42%

USMV’s Top Holdings are Eli Lilly and Co, Microsoft Corp, T-Mobile US Inc, Accenture PLC Class A, and Visa Inc Class A at 1.64%, 1.62%, 1.51%, 1.51%, and 1.49%.

Waste Management Inc (1.45%), Adobe Inc (1.45%), and The Kroger Co (1.44%) have a slightly smaller but still significant weight. Johnson & Johnson and Gilead Sciences Inc are also represented in the USMV’s holdings at 1.42% and 1.42%.

SDY - Holdings

SDY HoldingsWeight
Exxon Mobil Corp2.81%
AT&T Inc2.5%
South Jersey Industries Inc2.22%
Chevron Corp2.02%
International Business Machines Corp2.0%
AbbVie Inc1.93%
National Retail Properties Inc1.86%
Federal Realty Investment Trust1.77%
Realty Income Corp1.7%
Old Republic International Corp1.65%

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%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

USMVSDY
Mean Return01.07
R-squared083.62
Std. Deviation012.9
Alpha0-0.1
Beta00.87
Sharpe Ratio00.95
Treynor Ratio013.94

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

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

USMV’s Mean Return is 1.07 points lower than that of SDY and its R-squared is 83.62 points lower. With a Standard Deviation of 0, USMV is slightly less volatile than SDY. The Alpha and Beta of USMV are 0.10 points higher and 0.87 points lower than SDY’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

USMV vs. SDY - Annual Returns

YearUSMVSDY
20205.6%1.78%
201927.77%23.37%
20181.36%-2.73%
201718.97%15.84%
201610.5%20.17%
20155.5%-0.7%
201416.34%13.8%
201325.11%30.09%
201211.04%11.51%
20110.0%7.28%
20100.0%16.41%

USMV had its best year in 2019 with an annual return of 27.77%. USMV’s worst year over the past decade yielded 0.0% and occurred in 2011. In most years the iShares MSCI USA Min Vol Factor ETF provided moderate returns such as in 2020, 2016, and 2012 where annual returns amounted to 5.6%, 10.5%, and 11.04% respectively.

The year 2013 was the strongest year for SDY, returning 30.09% on an annual basis. The poorest year for SDY in the last ten years was 2018, with a yield of -2.73%. Most years the SPDR S&P Dividend ETF has given investors modest returns, such as in 2012, 2014, and 2017, when gains were 11.51%, 13.8%, and 15.84% respectively.

Portfolio Growth

USMV vs. SDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
USMV$10,000$27,60713.89%
SDY$10,000$24,99412.44%

A $10,000 investment in USMV would have resulted in a final balance of $27,607. This is a profit of $17,607 over 8 years and amounts to a compound annual growth rate (CAGR) of 13.89%.

With a $10,000 investment in SDY, the end total would have been $24,994. This equates to a $14,994 profit over 8 years and a compound annual growth rate (CAGR) of 12.44%.

USMV’s CAGR is 1.46 percentage points higher than that of SDY and as a result, would have yielded $2,613 more on a $10,000 investment. Thus, USMV outperformed SDY by 1.46% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

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