Skip to content

VO vs. SDY: What’s The Difference?

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

The expense ratio of VO is 0.31 percentage points lower than SDY’s (0.04% vs. 0.35%). VO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VO has provided higher returns than SDY over the past ten years.

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

VOSDY
NameVanguard Mid-Cap Index Fund ETF SharesSPDR S&P Dividend ETF
CategoryMid-Cap BlendLarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM154.08B19.67B
Avg. Return14.34%12.44%
Div. Yield1.23%2.65%
Expense Ratio0.04%0.35%

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 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%.

VO’s dividend yield is 1.42% lower than that of SDY (1.23% vs. 2.65%). Also, VO yielded on average 1.90% more per year over the past decade (14.34% vs. 12.44%). The expense ratio of VO is 0.31 percentage points lower than SDY’s (0.04% 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

VO vs. SDY - Industry Exposure

VOSDY
Technology22.01%2.0%
Industrials11.92%15.89%
Energy3.82%5.95%
Communication Services5.61%4.64%
Utilities5.12%12.14%
Healthcare13.03%7.35%
Consumer Defensive3.25%14.01%
Real Estate8.67%6.57%
Financial Services11.08%16.32%
Consumer Cyclical12.12%8.68%
Basic Materials3.36%6.45%

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 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%.

VO is 20.01% more exposed to the Technology sector than SDY (22.01% vs 2.0%). VO’s exposure to Healthcare and Consumer Cyclical stocks is 5.68% higher and 3.44% higher respectively (13.03% vs. 7.35% and 12.12% vs. 8.68%). In total, Basic Materials, Energy, and Utilities also make up 12.24% less of the fund’s holdings compared to SDY (12.30% vs. 24.54%).

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%.

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

VOSDY
Mean Return1.141.07
R-squared92.2283.62
Std. Deviation15.6512.9
Alpha-2.71-0.1
Beta1.110.87
Sharpe Ratio0.830.95
Treynor Ratio11.3213.94

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

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

VO’s Mean Return is 0.07 points higher than that of SDY and its R-squared is 8.60 points higher. With a Standard Deviation of 15.65, VO is slightly more volatile than SDY. The Alpha and Beta of VO are 2.61 points lower and 0.24 points higher 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

VO vs. SDY - Annual Returns

YearVOSDY
202018.22%1.78%
201931.04%23.37%
2018-9.21%-2.73%
201719.25%15.84%
201611.23%20.17%
2015-1.34%-0.7%
201413.76%13.8%
201335.15%30.09%
201215.98%11.51%
2011-1.96%7.28%
201025.57%16.41%

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 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

VO vs. SDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VO$10,000$40,40414.34%
SDY$10,000$34,80612.44%

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 SDY, the end total would have been $34,806. This equates to a $24,806 profit over 11 years and a compound annual growth rate (CAGR) of 12.44%.

VO’s CAGR is 1.90 percentage points higher than that of SDY and as a result, would have yielded $5,598 more on a $10,000 investment. Thus, VO outperformed SDY by 1.90% 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.