The Vanguard Total World Stock Index Fund ETF Shares (VT) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between VT and MDY? And which fund is better?
The expense ratio of VT is 0.15 percentage points lower than MDY’s (0.08% vs. 0.23%). VT also has a higher exposure to the technology sector and a lower standard deviation. Overall, VT has provided lower returns than MDY over the past 11 years.
In this article, we’ll compare VT vs. MDY. We’ll look at holdings and performance, as well as at their risk metrics and industry exposure. Moreover, I’ll also discuss VT’s and MDY’s portfolio growth, annual returns, and fund composition and examine how these affect their overall returns.
|Name||Vanguard Total World Stock Index Fund ETF Shares||SPDR S&P MIDCAP 400 ETF Trust|
|Issuer||Vanguard||SPDR State Street Global Advisors|
The Vanguard Total World Stock Index Fund ETF Shares (VT) is a N/A fund that is issued by Vanguard. It currently has 30.44B total assets under management and has yielded an average annual return of 10.42% over the past 10 years. The fund has a dividend yield of 1.65% with an expense ratio of 0.08%.
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%.
VT’s dividend yield is 0.71% higher than that of MDY (1.65% vs. 0.94%). Also, VT yielded on average 2.87% less per year over the past decade (10.42% vs. 13.29%). The expense ratio of VT is 0.15 percentage points lower than MDY’s (0.08% vs. 0.23%).
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The Vanguard Total World Stock Index Fund ETF Shares (VT) has the most exposure to the Technology sector at 19.63%. This is followed by Financial Services and Consumer Cyclical at 15.36% and 12.32% respectively. Energy (3.48%), Real Estate (3.64%), and Basic Materials (4.97%) only make up 12.09% of the fund’s total assets.
VT’s mid-section with moderate exposure is comprised of Consumer Defensive, Communication Services, Industrials, Healthcare, and Consumer Cyclical stocks at 6.71%, 9.02%, 10.7%, 11.58%, and 12.32%.
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%.
VT is 4.89% more exposed to the Technology sector than MDY (19.63% vs 14.74%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 0.16% higher and 2.57% lower respectively (15.36% vs. 15.2% and 12.32% vs. 14.89%). In total, Energy, Real Estate, and Basic Materials also make up 5.36% less of the fund’s holdings compared to MDY (12.09% vs. 17.45%).
|Facebook Inc Class A||1.1%|
|Alphabet Inc Class A||0.97%|
|Alphabet Inc Class C||0.95%|
|JPMorgan Chase & Co||0.62%|
|Tencent Holdings Ltd||0.6%|
VT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 2.85%, 2.71%, 1.98%, 1.1%, and 0.97%.
Alphabet Inc Class C (0.95%), Tesla Inc (0.7%), and NVIDIA Corp (0.64%) have a slightly smaller but still significant weight. JPMorgan Chase & Co and Tencent Holdings Ltd are also represented in the VT’s holdings at 0.62% and 0.6%.
|Molina Healthcare Inc||0.63%|
|Fair Isaac Corp||0.62%|
|XPO Logistics Inc||0.61%|
|SolarEdge Technologies Inc||0.61%|
|Camden Property Trust||0.55%|
|FactSet Research Systems Inc||0.54%|
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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The Vanguard Total World Stock Index Fund ETF Shares (VT) has a R-squared of 99.35 with a Sharpe Ratio of 0.71 and a Treynor Ratio of 9.5. Its Standard Deviation is 14.19 while VT’s Beta is 1.01. Furthermore, the fund has a Alpha of 0.2 and a Mean Return of 0.9.
The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a R-squared of 86.66 with a Sharpe Ratio of 0.73 and a Standard Deviation of 16.83. Its Beta is 1.15 while MDY’s Treynor Ratio is 9.97. Furthermore, the fund has a Mean Return of 1.08 and a Alpha of -4.1.
VT’s Mean Return is 0.18 points lower than that of MDY and its R-squared is 12.69 points higher. With a Standard Deviation of 14.19, VT is slightly less volatile than MDY. The Alpha and Beta of VT are 4.30 points higher and 0.14 points lower than MDY’s Alpha and Beta.
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VT had its best year in 2019 with an annual return of 26.8%. VT’s worst year over the past decade yielded -9.67% and occurred in 2018. In most years the Vanguard Total World Stock Index Fund ETF Shares provided moderate returns such as in 2016, 2010, and 2020 where annual returns amounted to 8.77%, 13.05%, and 16.74% 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.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in VT would have resulted in a final balance of $27,739. This is a profit of $17,739 over 11 years and amounts to a compound annual growth rate (CAGR) of 10.42%.
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%.
VT’s CAGR is 2.87 percentage points lower than that of MDY and as a result, would have yielded $8,785 less on a $10,000 investment. Thus, VT performed worse than MDY by 2.87% annually.
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