VTV vs. MDY: What’s The Difference?

The Vanguard Value Index Fund ETF Shares (VTV) and the SPDR S&P MIDCAP 400 ETF Trust (MDY) are both among the Top 100 ETFs. VTV is a Vanguard Large Value fund and MDY is a SPDR State Street Global Advisors Mid-Cap Blend fund. So, what’s the difference between VTV and MDY? And which fund is better?

The expense ratio of VTV is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%). VTV also has a higher exposure to the financial services sector and a lower standard deviation. Overall, VTV has provided lower returns than MDY over the past ten years.

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

Summary

VTV MDY
Name Vanguard Value Index Fund ETF Shares SPDR S&P MIDCAP 400 ETF Trust
Category Large Value Mid-Cap Blend
Issuer Vanguard SPDR State Street Global Advisors
AUM 125.77B 21.31B
Avg. Return 12.07% 13.29%
Div. Yield 2.15% 0.94%
Expense Ratio 0.04% 0.23%

The Vanguard Value Index Fund ETF Shares (VTV) is a Large Value fund that is issued by Vanguard. It currently has 125.77B total assets under management and has yielded an average annual return of 12.07% over the past 10 years. The fund has a dividend yield of 2.15% with an expense ratio of 0.04%.

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%.

VTV’s dividend yield is 1.21% higher than that of MDY (2.15% vs. 0.94%). Also, VTV yielded on average 1.21% less per year over the past decade (12.07% vs. 13.29%). The expense ratio of VTV is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%).

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Fund Composition

Industry Exposure

VTV vs. MDY - Industry Exposure

VTV MDY
Technology 7.86% 14.74%
Industrials 12.61% 17.88%
Energy 5.59% 2.52%
Communication Services 5.49% 1.63%
Utilities 5.37% 2.84%
Healthcare 19.84% 11.17%
Consumer Defensive 10.72% 4.2%
Real Estate 3.01% 9.66%
Financial Services 22.81% 15.2%
Consumer Cyclical 3.79% 14.89%
Basic Materials 2.91% 5.27%

The Vanguard Value Index Fund ETF Shares (VTV) has the most exposure to the Financial Services sector at 22.81%. This is followed by Healthcare and Industrials at 19.84% and 12.61% respectively. Real Estate (3.01%), Consumer Cyclical (3.79%), and Utilities (5.37%) only make up 12.17% of the fund’s total assets.

VTV’s mid-section with moderate exposure is comprised of Communication Services, Energy, Technology, Consumer Defensive, and Industrials stocks at 5.49%, 5.59%, 7.86%, 10.72%, and 12.61%.

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%.

VTV is 7.61% more exposed to the Financial Services sector than MDY (22.81% vs 15.2%). VTV’s exposure to Healthcare and Industrials stocks is 8.67% higher and 5.27% lower respectively (19.84% vs. 11.17% and 12.61% vs. 17.88%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 15.22% less of the fund’s holdings compared to MDY (12.17% vs. 27.39%).

Holdings

VTV - Holdings

VTV Holdings Weight
Berkshire Hathaway Inc Class B 2.98%
JPMorgan Chase & Co 2.82%
Johnson & Johnson 2.6%
UnitedHealth Group Inc 2.27%
Procter & Gamble Co 1.98%
Bank of America Corp 1.91%
Exxon Mobil Corp 1.6%
Comcast Corp Class A 1.57%
Intel Corp 1.36%
Verizon Communications Inc 1.32%

VTV’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Johnson & Johnson, UnitedHealth Group Inc, and Procter & Gamble Co at 2.98%, 2.82%, 2.6%, 2.27%, and 1.98%.

Bank of America Corp (1.91%), Exxon Mobil Corp (1.6%), and Comcast Corp Class A (1.57%) have a slightly smaller but still significant weight. Intel Corp and Verizon Communications Inc are also represented in the VTV’s holdings at 1.36% and 1.32%.

MDY - Holdings

MDY Holdings Weight
Bio-Techne Corp 0.75%
Molina Healthcare Inc 0.63%
Cognex Corp 0.63%
Fair Isaac Corp 0.62%
XPO Logistics Inc 0.61%
SolarEdge Technologies Inc 0.61%
Signature Bank 0.6%
Graco Inc 0.55%
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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Risk Analysis

VTV MDY
Mean Return 1.05 1.08
R-squared 92.61 86.66
Std. Deviation 13.78 16.83
Alpha -1.92 -4.1
Beta 0.98 1.15
Sharpe Ratio 0.87 0.73
Treynor Ratio 11.94 9.97

The Vanguard Value Index Fund ETF Shares (VTV) has a Mean Return of 1.05 with a Alpha of -1.92 and a Standard Deviation of 13.78. Its Sharpe Ratio is 0.87 while VTV’s R-squared is 92.61. Furthermore, the fund has a Beta of 0.98 and a Treynor Ratio of 11.94.

The SPDR S&P MIDCAP 400 ETF Trust (MDY) has a Beta of 1.15 with a Sharpe Ratio of 0.73 and a Treynor Ratio of 9.97. Its Alpha is -4.1 while MDY’s Mean Return is 1.08. Furthermore, the fund has a R-squared of 86.66 and a Standard Deviation of 16.83.

VTV’s Mean Return is 0.03 points lower than that of MDY and its R-squared is 5.95 points higher. With a Standard Deviation of 13.78, VTV is slightly less volatile than MDY. The Alpha and Beta of VTV are 2.18 points higher and 0.17 points lower than MDY’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. MDY - Annual Returns

Year VTV MDY
2020 2.23% 13.51%
2019 25.85% 25.86%
2018 -5.39% -11.28%
2017 17.12% 15.89%
2016 16.88% 20.33%
2015 -0.89% -2.4%
2014 13.19% 9.42%
2013 33.03% 33.08%
2012 15.19% 17.58%
2011 1.16% -1.99%
2010 14.45% 26.17%

VTV had its best year in 2013 with an annual return of 33.03%. VTV’s worst year over the past decade yielded -5.39% and occurred in 2018. In most years the Vanguard Value Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.19%, 14.45%, and 15.19% 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.

Portfolio Growth

VTV vs. MDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
MDY $10,000 $36,524 13.29%

A $10,000 investment in VTV would have resulted in a final balance of $33,163. This is a profit of $23,163 over 11 years and amounts to a compound annual growth rate (CAGR) of 12.07%.

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%.

VTV’s CAGR is 1.21 percentage points lower than that of MDY and as a result, would have yielded $3,361 less on a $10,000 investment. Thus, VTV performed worse than MDY by 1.21% annually.


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