VTV vs. SDY: What’s The Difference?

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

The expense ratio of VTV is 0.31 percentage points lower than SDY’s (0.04% vs. 0.35%). VTV also has a higher exposure to the financial services sector and a higher standard deviation. Overall, VTV has provided lower returns than SDY over the past ten years.

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

Summary

VTV SDY
Name Vanguard Value Index Fund ETF Shares SPDR S&P Dividend ETF
Category Large Value Large Value
Issuer Vanguard SPDR State Street Global Advisors
AUM 125.77B 19.67B
Avg. Return 12.07% 12.44%
Div. Yield 2.15% 2.65%
Expense Ratio 0.04% 0.35%

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 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%.

VTV’s dividend yield is 0.50% lower than that of SDY (2.15% vs. 2.65%). Also, VTV yielded on average 0.36% less per year over the past decade (12.07% vs. 12.44%). The expense ratio of VTV is 0.31 percentage points lower than SDY’s (0.04% vs. 0.35%).

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Fund Composition

Industry Exposure

VTV vs. SDY - Industry Exposure

VTV SDY
Technology 7.86% 2.0%
Industrials 12.61% 15.89%
Energy 5.59% 5.95%
Communication Services 5.49% 4.64%
Utilities 5.37% 12.14%
Healthcare 19.84% 7.35%
Consumer Defensive 10.72% 14.01%
Real Estate 3.01% 6.57%
Financial Services 22.81% 16.32%
Consumer Cyclical 3.79% 8.68%
Basic Materials 2.91% 6.45%

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 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%.

VTV is 6.49% more exposed to the Financial Services sector than SDY (22.81% vs 16.32%). VTV’s exposure to Healthcare and Industrials stocks is 12.49% higher and 3.28% lower respectively (19.84% vs. 7.35% and 12.61% vs. 15.89%). In total, Real Estate, Consumer Cyclical, and Utilities also make up 15.22% less of the fund’s holdings compared to SDY (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%.

SDY - Holdings

SDY Holdings Weight
Exxon Mobil Corp 2.81%
AT&T Inc 2.5%
South Jersey Industries Inc 2.22%
Chevron Corp 2.02%
International Business Machines Corp 2.0%
AbbVie Inc 1.93%
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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Risk Analysis

VTV SDY
Mean Return 1.05 1.07
R-squared 92.61 83.62
Std. Deviation 13.78 12.9
Alpha -1.92 -0.1
Beta 0.98 0.87
Sharpe Ratio 0.87 0.95
Treynor Ratio 11.94 13.94

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

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

VTV’s Mean Return is 0.02 points lower than that of SDY and its R-squared is 8.99 points higher. With a Standard Deviation of 13.78, VTV is slightly more volatile than SDY. The Alpha and Beta of VTV are 1.82 points lower and 0.11 points higher than SDY’s Alpha and Beta.

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Performance

Annual Returns

VTV vs. SDY - Annual Returns

Year VTV SDY
2020 2.23% 1.78%
2019 25.85% 23.37%
2018 -5.39% -2.73%
2017 17.12% 15.84%
2016 16.88% 20.17%
2015 -0.89% -0.7%
2014 13.19% 13.8%
2013 33.03% 30.09%
2012 15.19% 11.51%
2011 1.16% 7.28%
2010 14.45% 16.41%

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 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

VTV vs. SDY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
VTV $10,000 $33,163 12.07%
SDY $10,000 $34,806 12.44%

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 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%.

VTV’s CAGR is 0.36 percentage points lower than that of SDY and as a result, would have yielded $1,643 less on a $10,000 investment. Thus, VTV performed worse than SDY by 0.36% annually.


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