DFNM vs SPY
Dimensional National Municipal Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. DFNM offers more diversification with 1,094 holdings.
Side-by-Side Comparison
| Metric | DFNM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.17% | 0.09% | |
| AUM | $2.3B | $821.1B | |
| Dividend Yield | 2.98% | 1.01% | |
| Holdings | 1,094 | 505 | |
| YTD Return | +0.28% | +12.68% | |
| 1Y Return | +3.38% | +21.82% | |
| 3Y Return (annualized) | +3.06% | +21.98% | |
| 5Y Return (annualized) | - | +12.89% | |
| Volatility (annualized) | 4.1% | 15.3% | |
| Max Drawdown | -7.0% | -56.5% | |
| Fund Family | Dimensional | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 15, 2021 | Jan 22, 1993 |
DFNM vs SPY Performance
Dimensional National Municipal Bond ETF (DFNM) 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 DFNM returned +3.38% while SPY returned +21.82%. Year to date, DFNM is up 0.28% versus a gain of 12.68% for SPY.
Over three years, DFNM compounded at +3.06% per year against +21.98% for SPY. Across the full 5-year window we track, SPY has the edge at +8.81% annualized vs +1.17%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 4.1% for DFNM. 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 -7.0% for DFNM 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
DFNM charges 0.17% per year while SPY charges 0.09%. On a $10,000 position that is $17 vs $9 annually, a gap of $8 per year that compounds over a long holding period. On income, DFNM currently yields 2.98% against 1.01% for SPY.
Holdings Overlap
DFNM and SPY share 0 holdings out of 678 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, DFNM or SPY?
DFNM has an expense ratio of 0.17% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $8 per year of difference.
Which performed better, DFNM or SPY?
Over the past year DFNM returned +3.38% vs +21.82% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (5 years), DFNM annualized +1.17% vs +8.81% for SPY. Past performance does not guarantee future results.
Which is riskier, DFNM or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 4.1% for DFNM. Worst drawdown: DFNM -7.0% vs SPY -56.5%.
Should I hold both DFNM and SPY?
DFNM and SPY have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between DFNM and SPY?
DFNM and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 678 unique securities.
Which pays a higher dividend, DFNM or SPY?
DFNM yields 2.98% while SPY yields 1.01%, so DFNM currently pays the higher dividend yield.
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