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.

Summary

VV MDY
Name Vanguard Large-Cap Index Fund ETF Shares SPDR S&P MIDCAP 400 ETF Trust
Category Large Blend Mid-Cap Blend
Issuer Vanguard SPDR State Street Global Advisors
AUM 37.65B 21.31B
Avg. Return 14.75% 13.29%
Div. Yield 1.26% 0.94%
Expense Ratio 0.04% 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

VV MDY
Technology 25.38% 14.74%
Industrials 8.39% 17.88%
Energy 2.62% 2.52%
Communication Services 11.68% 1.63%
Utilities 2.35% 2.84%
Healthcare 13.22% 11.17%
Consumer Defensive 6.06% 4.2%
Real Estate 2.7% 9.66%
Financial Services 13.82% 15.2%
Consumer Cyclical 11.65% 14.89%
Basic Materials 2.13% 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 Holdings Weight
Apple Inc 5.7%
Microsoft Corp 5.35%
Amazon.com Inc 3.87%
Facebook Inc Class A 2.19%
Alphabet Inc Class A 1.93%
Alphabet Inc Class C 1.81%
Tesla Inc 1.37%
Berkshire Hathaway Inc Class B 1.3%
NVIDIA Corp 1.24%
JPMorgan Chase & Co 1.24%

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 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

VV MDY
Mean Return 1.24 1.08
R-squared 99.86 86.66
Std. Deviation 13.75 16.83
Alpha -0.08 -4.1
Beta 1.01 1.15
Sharpe Ratio 1.04 0.73
Treynor Ratio 14.14 9.97

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

Year VV MDY
2020 20.99% 13.51%
2019 31.39% 25.86%
2018 -4.44% -11.28%
2017 22.03% 15.89%
2016 11.65% 20.33%
2015 1.07% -2.4%
2014 13.39% 9.42%
2013 32.65% 33.08%
2012 16.09% 17.58%
2011 1.58% -1.99%
2010 15.81% 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

Fund Initial Balance Final Balance CAGR
VV $10,000 $42,970 14.75%
MDY $10,000 $36,524 13.29%

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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