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VOO vs. SDY: What’s The Difference?

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

The expense ratio of VOO is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%). VOO also has a higher exposure to the technology sector and a higher standard deviation. Overall, VOO has provided higher returns than SDY over the past ten years.

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

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Summary

VOOSDY
NameVanguard S&P 500 ETFSPDR S&P Dividend ETF
CategoryLarge BlendLarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM753.41B19.67B
Avg. Return14.45%12.44%
Div. Yield1.34%2.65%
Expense Ratio0.03%0.35%

The Vanguard S&P 500 ETF (VOO) is a Large Blend fund that is issued by Vanguard. It currently has 753.41B total assets under management and has yielded an average annual return of 14.45% over the past 10 years. The fund has a dividend yield of 1.34% with an expense ratio of 0.03%.

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%.

VOO’s dividend yield is 1.31% lower than that of SDY (1.34% vs. 2.65%). Also, VOO yielded on average 2.01% more per year over the past decade (14.45% vs. 12.44%). The expense ratio of VOO is 0.32 percentage points lower than SDY’s (0.03% vs. 0.35%).

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Fund Composition

Industry Exposure

VOO vs. SDY - Industry Exposure

VOOSDY
Technology24.24%2.0%
Industrials8.86%15.89%
Energy2.84%5.95%
Communication Services11.14%4.64%
Utilities2.43%12.14%
Healthcare13.1%7.35%
Consumer Defensive6.32%14.01%
Real Estate2.58%6.57%
Financial Services14.2%16.32%
Consumer Cyclical12.01%8.68%
Basic Materials2.27%6.45%

The Vanguard S&P 500 ETF (VOO) has the most exposure to the Technology sector at 24.24%. This is followed by Financial Services and Healthcare at 14.2% and 13.1% respectively. Utilities (2.43%), Real Estate (2.58%), and Energy (2.84%) only make up 7.85% of the fund’s total assets.

VOO’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%, 12.01%, and 13.1%.

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%.

VOO is 22.24% more exposed to the Technology sector than SDY (24.24% vs 2.0%). VOO’s exposure to Financial Services and Healthcare stocks is 2.12% lower and 5.75% higher respectively (14.2% vs. 16.32% and 13.1% vs. 7.35%). In total, Utilities, Real Estate, and Energy also make up 16.81% less of the fund’s holdings compared to SDY (7.85% vs. 24.66%).

Holdings

VOO - Holdings

VOO HoldingsWeight
Apple Inc5.92%
Microsoft Corp5.62%
Amazon.com Inc4.06%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.02%
Alphabet Inc Class C1.97%
Tesla Inc1.44%
Berkshire Hathaway Inc Class B1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.3%

VOO’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.92%, 5.62%, 4.06%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.97%), Tesla Inc (1.44%), and Berkshire Hathaway Inc Class B (1.44%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VOO’s holdings at 1.37% and 1.3%.

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%.

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Performance

Annual Returns

VOO vs. SDY - Annual Returns

YearVOOSDY
202018.35%1.78%
201931.46%23.37%
2018-4.42%-2.73%
201721.78%15.84%
201611.93%20.17%
20151.35%-0.7%
201413.63%13.8%
201332.33%30.09%
201215.98%11.51%
20112.09%7.28%
20100.0%16.41%

VOO had its best year in 2013 with an annual return of 32.33%. VOO’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the Vanguard S&P 500 ETF provided moderate returns such as in 2016, 2014, and 2012 where annual returns amounted to 11.93%, 13.63%, and 15.98% 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

VOO vs. SDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VOO$10,000$36,57514.45%
SDY$10,000$29,90012.44%

A $10,000 investment in VOO would have resulted in a final balance of $36,575. This is a profit of $26,575 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.45%.

With a $10,000 investment in SDY, the end total would have been $29,900. This equates to a $19,900 profit over 10 years and a compound annual growth rate (CAGR) of 12.44%.

VOO’s CAGR is 2.01 percentage points higher than that of SDY and as a result, would have yielded $6,675 more on a $10,000 investment. Thus, VOO outperformed SDY by 2.01% annually.


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