FAD vs SPY
First Trust Multi Cap Growth AlphaDEX Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FAD delivered stronger 1-year returns. FAD offers more diversification with 677 holdings.
Side-by-Side Comparison
| Metric | FAD | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.63% | 0.09% | |
| AUM | $608M | $821.1B | |
| Dividend Yield | 0.10% | 1.01% | |
| Holdings | 677 | 505 | |
| YTD Return | +15.82% | +12.93% | |
| 1Y Return | +24.30% | +20.62% | |
| 3Y Return (annualized) | +23.26% | +22.00% | |
| 5Y Return (annualized) | +10.40% | +13.33% | |
| Volatility (annualized) | 18.7% | 15.3% | |
| Max Drawdown | -54.5% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | May 8, 2007 | Jan 22, 1993 |
FAD vs SPY Performance
First Trust Multi Cap Growth AlphaDEX Fund (FAD) is a ETF from First Trust Portfolios (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FAD returned +24.30% while SPY returned +20.62%. Year to date, FAD is up 15.82% versus a gain of 12.93% for SPY.
Over three years, FAD compounded at +23.26% per year against +22.00% for SPY; over five years the annualized figures are +10.40% and +13.33% respectively. Across the full 19-year window we track, FAD has the edge at +10.18% annualized vs +8.82%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAD has been the more volatile fund, with annualized monthly volatility of 18.7% 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 -54.5% for FAD 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 0.90. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
FAD charges 0.63% per year while SPY charges 0.09%. On a $10,000 position that is $63 vs $9 annually, a gap of $54 per year that compounds over a long holding period. On income, FAD currently yields 0.10% against 1.01% for SPY.
Holdings Overlap
FAD and SPY share 153 holdings out of 1014 unique holdings combined, representing a 20.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FAD or SPY?
FAD has an expense ratio of 0.63% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $54 per year of difference.
Which performed better, FAD or SPY?
Over the past year FAD returned +24.30% vs +20.62% for SPY, so FAD leads on 1-year performance. Over the longest common window we track (19 years), FAD annualized +10.18% vs +8.82% for SPY. Past performance does not guarantee future results.
Which is riskier, FAD or SPY?
FAD has been the more volatile fund at 18.7% annualized versus 15.3% for SPY. Worst drawdown: FAD -54.5% vs SPY -56.5%.
Should I hold both FAD and SPY?
FAD and SPY have a monthly-return correlation of 0.90, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between FAD and SPY?
FAD and SPY share 153 common holdings with a 20.5% weight overlap. Combined, they hold 1014 unique securities.
Which pays a higher dividend, FAD or SPY?
FAD yields 0.10% while SPY yields 1.01%, so SPY currently pays the higher dividend yield.
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