DFEM vs SPY
Dimensional Emerging Markets Core Equity 2 ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. DFEM delivered stronger 1-year returns. DFEM offers more diversification with 6316 holdings.
Side-by-Side Comparison
| Metric | DFEM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.39% | 0.09% | |
| AUM | $8.9B | $789.1B | |
| Dividend Yield | 1.85% | 1.01% | |
| Holdings | 6,512 | 505 | |
| YTD Return | +16.40% | +13.75% | |
| 1Y Return | +31.26% | +22.91% | |
| 3Y Return (annualized) | +20.46% | +21.67% | |
| 5Y Return (annualized) | - | +13.32% | |
| Volatility (annualized) | 17.4% | 15.3% | |
| Max Drawdown | -20.8% | -56.5% | |
| Fund Family | Dimensional | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Apr 26, 2022 | Jan 22, 1993 |
DFEM vs SPY Performance
Dimensional Emerging Markets Core Equity 2 ETF (DFEM) is a ETF from Dimensional and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year DFEM returned +31.26% while SPY returned +22.91%. Year to date, DFEM is up 16.40% versus a gain of 13.75% for SPY.
Over three years, DFEM compounded at +20.46% per year against +21.67% for SPY. Across the full 4-year window we track, DFEM has the edge at +13.55% annualized vs +8.85%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
DFEM has been the more volatile fund, with annualized monthly volatility of 17.4% compared with 15.3% for SPY. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -20.8% for DFEM and -56.5% for SPY. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFEM charges 0.39% per year while SPY charges 0.09%. On a $10,000 position that is $39 vs $9 annually, a gap of $30 per year that compounds over a long holding period. On income, DFEM currently yields 1.85% against 1.01% for SPY.
Holdings Overlap
DFEM and SPY share 1 holdings out of 6818 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in DFEM | Weight in SPY | Difference |
|---|---|---|---|
| HAL | 0.06% | 0.04% | 0.02% |
Frequently Asked Questions
Which is cheaper, DFEM or SPY?
DFEM has an expense ratio of 0.39% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $30 per year of difference.
Which performed better, DFEM or SPY?
Over the past year DFEM returned +31.26% vs +22.91% for SPY, so DFEM leads on 1-year performance. Over the longest common window we track (4 years), DFEM annualized +13.55% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, DFEM or SPY?
DFEM has been the more volatile fund at 17.4% annualized versus 15.3% for SPY. Worst drawdown: DFEM -20.8% vs SPY -56.5%.
Should I hold both DFEM and SPY?
DFEM and SPY have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFEM and SPY?
DFEM and SPY share 1 common holdings with a 0.0% weight overlap. Combined, they hold 6818 unique securities.
Which pays a higher dividend, DFEM or SPY?
DFEM yields 1.85% while SPY yields 1.01%, so DFEM currently pays the higher dividend yield.
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