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VV vs. MDY: What’s The Difference?

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

The expense ratio of VV is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%). VV also has a higher exposure to the technology sector and a lower standard deviation. Overall, VV has provided higher returns than MDY over the past 11 years.

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

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Summary

VVMDY
NameVanguard Large-Cap Index Fund ETF SharesSPDR S&P MIDCAP 400 ETF Trust
CategoryLarge BlendMid-Cap Blend
IssuerVanguardSPDR State Street Global Advisors
AUM37.65B21.31B
Avg. Return14.75%13.29%
Div. Yield1.26%0.94%
Expense Ratio0.04%0.23%

The Vanguard Large-Cap Index Fund ETF Shares (VV) is a Large Blend fund that is issued by Vanguard. It currently has 37.65B total assets under management and has yielded an average annual return of 14.75% over the past 10 years. The fund has a dividend yield of 1.26% 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%.

VV’s dividend yield is 0.32% higher than that of MDY (1.26% vs. 0.94%). Also, VV yielded on average 1.46% more per year over the past decade (14.75% vs. 13.29%). The expense ratio of VV is 0.19 percentage points lower than MDY’s (0.04% vs. 0.23%).

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Fund Composition

Industry Exposure

VV vs. MDY - Industry Exposure

VVMDY
Technology25.38%14.74%
Industrials8.39%17.88%
Energy2.62%2.52%
Communication Services11.68%1.63%
Utilities2.35%2.84%
Healthcare13.22%11.17%
Consumer Defensive6.06%4.2%
Real Estate2.7%9.66%
Financial Services13.82%15.2%
Consumer Cyclical11.65%14.89%
Basic Materials2.13%5.27%

The Vanguard Large-Cap Index Fund ETF Shares (VV) has the most exposure to the Technology sector at 25.38%. This is followed by Financial Services and Healthcare at 13.82% and 13.22% respectively. Utilities (2.35%), Energy (2.62%), and Real Estate (2.7%) only make up 7.67% of the fund’s total assets.

VV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Consumer Cyclical, Communication Services, and Healthcare stocks at 6.06%, 8.39%, 11.65%, 11.68%, and 13.22%.

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%.

VV is 10.64% more exposed to the Technology sector than MDY (25.38% vs 14.74%). VV’s exposure to Financial Services and Healthcare stocks is 1.38% lower and 2.05% higher respectively (13.82% vs. 15.2% and 13.22% vs. 11.17%). In total, Utilities, Energy, and Real Estate also make up 7.35% less of the fund’s holdings compared to MDY (7.67% vs. 15.02%).

Holdings

VV - Holdings

VV HoldingsWeight
Apple Inc5.7%
Microsoft Corp5.35%
Amazon.com Inc3.87%
Facebook Inc Class A2.19%
Alphabet Inc Class A1.93%
Alphabet Inc Class C1.81%
Tesla Inc1.37%
Berkshire Hathaway Inc Class B1.3%
NVIDIA Corp1.24%
JPMorgan Chase & Co1.24%

VV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.7%, 5.35%, 3.87%, 2.19%, and 1.93%.

Alphabet Inc Class C (1.81%), Tesla Inc (1.37%), and Berkshire Hathaway Inc Class B (1.3%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the VV’s holdings at 1.24% and 1.24%.

MDY - Holdings

MDY HoldingsWeight
Bio-Techne Corp0.75%
Molina Healthcare Inc0.63%
Cognex Corp0.63%
Fair Isaac Corp0.62%
XPO Logistics Inc0.61%
SolarEdge Technologies Inc0.61%
Signature Bank0.6%
Graco Inc0.55%
Camden Property Trust0.55%
FactSet Research Systems Inc0.54%

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

VVMDY
Mean Return1.241.08
R-squared99.8686.66
Std. Deviation13.7516.83
Alpha-0.08-4.1
Beta1.011.15
Sharpe Ratio1.040.73
Treynor Ratio14.149.97

The Vanguard Large-Cap Index Fund ETF Shares (VV) has a Sharpe Ratio of 1.04 with a Treynor Ratio of 14.14 and a Beta of 1.01. Its Mean Return is 1.24 while VV’s Alpha is -0.08. Furthermore, the fund has a Standard Deviation of 13.75 and a R-squared of 99.86.

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

VV’s Mean Return is 0.16 points higher than that of MDY and its R-squared is 13.20 points higher. With a Standard Deviation of 13.75, VV is slightly less volatile than MDY. The Alpha and Beta of VV are 4.02 points higher and 0.14 points lower than MDY’s Alpha and Beta.

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Performance

Annual Returns

VV vs. MDY - Annual Returns

YearVVMDY
202020.99%13.51%
201931.39%25.86%
2018-4.44%-11.28%
201722.03%15.89%
201611.65%20.33%
20151.07%-2.4%
201413.39%9.42%
201332.65%33.08%
201216.09%17.58%
20111.58%-1.99%
201015.81%26.17%

VV had its best year in 2013 with an annual return of 32.65%. VV’s worst year over the past decade yielded -4.44% and occurred in 2018. In most years the Vanguard Large-Cap Index Fund ETF Shares provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.39%, 15.81%, and 16.09% 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

VV vs. MDY - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
VV$10,000$42,97014.75%
MDY$10,000$36,52413.29%

A $10,000 investment in VV would have resulted in a final balance of $42,970. This is a profit of $32,970 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.75%.

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%.

VV’s CAGR is 1.46 percentage points higher than that of MDY and as a result, would have yielded $6,446 more on a $10,000 investment. Thus, VV outperformed MDY by 1.46% annually.


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