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VO vs. MDY: What’s The Difference?

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

The expense ratio of VO is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%). VO also has a higher exposure to the technology sector and a lower standard deviation. Overall, VO has provided higher returns than MDY over the past ten years.

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

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Summary

VOMDY
NameVanguard Mid-Cap Index Fund ETF SharesSPDR S&P MIDCAP 400 ETF Trust
CategoryMid-Cap BlendMid-Cap Blend
IssuerVanguardSPDR State Street Global Advisors
AUM154.08B21.31B
Avg. Return14.34%13.29%
Div. Yield1.23%0.94%
Expense Ratio0.04%0.23%

The Vanguard Mid-Cap Index Fund ETF Shares (VO) is a Mid-Cap Blend fund that is issued by Vanguard. It currently has 154.08B total assets under management and has yielded an average annual return of 14.34% over the past 10 years. The fund has a dividend yield of 1.23% with an expense ratio of 0.04%.

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%.

VO’s dividend yield is 0.29% higher than that of MDY (1.23% vs. 0.94%). Also, VO yielded on average 1.05% more per year over the past decade (14.34% vs. 13.29%). The expense ratio of VO is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%).

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Fund Composition

Industry Exposure

VO vs. MDY - Industry Exposure

VOMDY
Technology22.01%14.74%
Industrials11.92%17.88%
Energy3.82%2.52%
Communication Services5.61%1.63%
Utilities5.12%2.84%
Healthcare13.03%11.17%
Consumer Defensive3.25%4.2%
Real Estate8.67%9.66%
Financial Services11.08%15.2%
Consumer Cyclical12.12%14.89%
Basic Materials3.36%5.27%

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has the most exposure to the Technology sector at 22.01%. This is followed by Healthcare and Consumer Cyclical at 13.03% and 12.12% respectively. Basic Materials (3.36%), Energy (3.82%), and Utilities (5.12%) only make up 12.30% of the fund’s total assets.

VO’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Industrials, and Consumer Cyclical stocks at 5.61%, 8.67%, 11.08%, 11.92%, and 12.12%.

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%.

VO is 7.27% more exposed to the Technology sector than MDY (22.01% vs 14.74%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 1.86% higher and 2.77% lower respectively (13.03% vs. 11.17% and 12.12% vs. 14.89%). In total, Basic Materials, Energy, and Utilities also make up 1.67% more of the fund’s holdings compared to MDY (12.30% vs. 10.63%).

Holdings

VO - Holdings

VO HoldingsWeight
IDEXX Laboratories Inc0.78%
DocuSign Inc0.75%
Marvell Technology Inc0.68%
IQVIA Holdings Inc0.68%
Chipotle Mexican Grill Inc0.63%
Veeva Systems Inc Class A0.62%
Digital Realty Trust Inc0.62%
Centene Corp0.62%
Aptiv PLC0.62%
Carrier Global Corp Ordinary Shares0.61%

VO’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Marvell Technology Inc, IQVIA Holdings Inc, and Chipotle Mexican Grill Inc at 0.78%, 0.75%, 0.68%, 0.68%, and 0.63%.

Veeva Systems Inc Class A (0.62%), Digital Realty Trust Inc (0.62%), and Centene Corp (0.62%) have a slightly smaller but still significant weight. Aptiv PLC and Carrier Global Corp Ordinary Shares are also represented in the VO’s holdings at 0.62% and 0.61%.

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%.

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Risk Analysis

VOMDY
Mean Return1.141.08
R-squared92.2286.66
Std. Deviation15.6516.83
Alpha-2.71-4.1
Beta1.111.15
Sharpe Ratio0.830.73
Treynor Ratio11.329.97

The Vanguard Mid-Cap Index Fund ETF Shares (VO) has a Alpha of -2.71 with a Treynor Ratio of 11.32 and a R-squared of 92.22. Its Sharpe Ratio is 0.83 while VO’s Standard Deviation is 15.65. Furthermore, the fund has a Beta of 1.11 and a Mean Return of 1.14.

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

VO’s Mean Return is 0.06 points higher than that of MDY and its R-squared is 5.56 points higher. With a Standard Deviation of 15.65, VO is slightly less volatile than MDY. The Alpha and Beta of VO are 1.39 points higher and 0.04 points lower than MDY’s Alpha and Beta.

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Performance

Annual Returns

VO vs. MDY - Annual Returns

YearVOMDY
202018.22%13.51%
201931.04%25.86%
2018-9.21%-11.28%
201719.25%15.89%
201611.23%20.33%
2015-1.34%-2.4%
201413.76%9.42%
201335.15%33.08%
201215.98%17.58%
2011-1.96%-1.99%
201025.57%26.17%

VO had its best year in 2013 with an annual return of 35.15%. VO’s worst year over the past decade yielded -9.21% and occurred in 2018. In most years the Vanguard Mid-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2012, and 2020 where annual returns amounted to 13.76%, 15.98%, and 18.22% 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

VO vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$40,40414.34%
MDY$10,000$36,52413.29%

A $10,000 investment in VO would have resulted in a final balance of $40,404. This is a profit of $30,404 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.34%.

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%.

VO’s CAGR is 1.05 percentage points higher than that of MDY and as a result, would have yielded $3,880 more on a $10,000 investment. Thus, VO outperformed MDY by 1.05% annually.


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