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.
|Name||Vanguard Mid-Cap Index Fund ETF Shares||SPDR S&P Dividend ETF|
|Category||Mid-Cap Blend||Large Value|
|Issuer||Vanguard||SPDR State Street Global Advisors|
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%).
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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%).
|IDEXX Laboratories Inc||0.78%|
|Marvell Technology Inc||0.68%|
|IQVIA Holdings Inc||0.68%|
|Chipotle Mexican Grill Inc||0.63%|
|Veeva Systems Inc Class A||0.62%|
|Digital Realty Trust Inc||0.62%|
|Carrier Global Corp Ordinary Shares||0.61%|
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%.
|Exxon Mobil Corp||2.81%|
|South Jersey Industries Inc||2.22%|
|International Business Machines Corp||2.0%|
|National Retail Properties Inc||1.86%|
|Federal Realty Investment Trust||1.77%|
|Realty Income Corp||1.7%|
|Old Republic International Corp||1.65%|
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%.
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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.
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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.
|Fund||Initial Balance||Final Balance||CAGR|
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.
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