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VT vs. SDY: What’s The Difference?

The Vanguard Total World Stock Index Fund ETF Shares (VT) and the SPDR S&P Dividend ETF (SDY) are both among the Top 100 ETFs. VT is a Vanguard N/A fund and SDY is a SPDR State Street Global Advisors Large Value fund. So, what’s the difference between VT and SDY? And which fund is better?

The expense ratio of VT is 0.27 percentage points lower than SDY’s (0.08% vs. 0.35%). VT also has a higher exposure to the technology sector and a higher standard deviation. Overall, VT has provided lower returns than SDY over the past 11 years.

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

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Summary

VTSDY
NameVanguard Total World Stock Index Fund ETF SharesSPDR S&P Dividend ETF
CategoryN/ALarge Value
IssuerVanguardSPDR State Street Global Advisors
AUM30.44B19.67B
Avg. Return10.42%12.44%
Div. Yield1.65%2.65%
Expense Ratio0.08%0.35%

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 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%.

VT’s dividend yield is 1.00% lower than that of SDY (1.65% vs. 2.65%). Also, VT yielded on average 2.02% less per year over the past decade (10.42% vs. 12.44%). The expense ratio of VT is 0.27 percentage points lower than SDY’s (0.08% vs. 0.35%).

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Fund Composition

Industry Exposure

VT vs. SDY - Industry Exposure

VTSDY
Technology19.63%2.0%
Industrials10.7%15.89%
Energy3.48%5.95%
Communication Services9.02%4.64%
Utilities2.6%12.14%
Healthcare11.58%7.35%
Consumer Defensive6.71%14.01%
Real Estate3.64%6.57%
Financial Services15.36%16.32%
Consumer Cyclical12.32%8.68%
Basic Materials4.97%6.45%

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 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%.

VT is 17.63% more exposed to the Technology sector than SDY (19.63% vs 2.0%). VT’s exposure to Financial Services and Consumer Cyclical stocks is 0.96% lower and 3.64% higher respectively (15.36% vs. 16.32% and 12.32% vs. 8.68%). In total, Energy, Real Estate, and Basic Materials also make up 6.88% less of the fund’s holdings compared to SDY (12.09% vs. 18.97%).

Holdings

VT - Holdings

VT HoldingsWeight
Apple Inc2.85%
Microsoft Corp2.71%
Amazon.com Inc1.98%
Facebook Inc Class A1.1%
Alphabet Inc Class A0.97%
Alphabet Inc Class C0.95%
Tesla Inc0.7%
NVIDIA Corp0.64%
JPMorgan Chase & Co0.62%
Tencent Holdings Ltd0.6%

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%.

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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Risk Analysis

VTSDY
Mean Return0.91.07
R-squared99.3583.62
Std. Deviation14.1912.9
Alpha0.2-0.1
Beta1.010.87
Sharpe Ratio0.710.95
Treynor Ratio9.513.94

The Vanguard Total World Stock Index Fund ETF Shares (VT) has a Standard Deviation of 14.19 with a Mean Return of 0.9 and a Beta of 1.01. Its R-squared is 99.35 while VT’s Sharpe Ratio is 0.71. Furthermore, the fund has a Treynor Ratio of 9.5 and a Alpha of 0.2.

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

VT’s Mean Return is 0.17 points lower than that of SDY and its R-squared is 15.73 points higher. With a Standard Deviation of 14.19, VT is slightly more volatile than SDY. The Alpha and Beta of VT are 0.30 points higher and 0.14 points higher than SDY’s Alpha and Beta.

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Performance

Annual Returns

VT vs. SDY - Annual Returns

YearVTSDY
202016.74%1.78%
201926.8%23.37%
2018-9.67%-2.73%
201724.19%15.84%
20168.77%20.17%
2015-1.88%-0.7%
20143.97%13.8%
201322.98%30.09%
201217.33%11.51%
2011-7.71%7.28%
201013.05%16.41%

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 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

VT vs. SDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VT$10,000$27,73910.42%
SDY$10,000$34,80612.44%

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 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%.

VT’s CAGR is 2.02 percentage points lower than that of SDY and as a result, would have yielded $7,067 less on a $10,000 investment. Thus, VT performed worse than SDY by 2.02% annually.


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