FALN vs SPY
iShares Fallen Angels USD 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. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FALN | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.25% | 0.09% | |
| AUM | $1.6B | $821.1B | |
| Dividend Yield | 6.51% | 1.01% | |
| Holdings | 159 | 505 | |
| YTD Return | +2.62% | +12.68% | |
| 1Y Return | +6.43% | +21.82% | |
| 3Y Return (annualized) | +9.20% | +21.98% | |
| 5Y Return (annualized) | +3.57% | +12.89% | |
| Volatility (annualized) | 9.4% | 15.3% | |
| Max Drawdown | -30.0% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jun 14, 2016 | Jan 22, 1993 |
FALN vs SPY Performance
iShares Fallen Angels USD Bond ETF (FALN) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FALN returned +6.43% while SPY returned +21.82%. Year to date, FALN is up 2.62% versus a gain of 12.68% for SPY.
Over three years, FALN compounded at +9.20% per year against +21.98% for SPY; over five years the annualized figures are +3.57% and +12.89% respectively. Across the full 10-year window we track, SPY has the edge at +8.81% annualized vs +3.72%. 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 9.4% for FALN. 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 -30.0% for FALN 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 0.79. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FALN charges 0.25% per year while SPY charges 0.09%. On a $10,000 position that is $25 vs $9 annually, a gap of $16 per year that compounds over a long holding period. On income, FALN currently yields 6.51% against 1.01% for SPY.
Holdings Overlap
FALN and SPY share 0 holdings out of 655 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, FALN or SPY?
FALN has an expense ratio of 0.25% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $16 per year of difference.
Which performed better, FALN or SPY?
Over the past year FALN returned +6.43% vs +21.82% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (10 years), FALN annualized +3.72% vs +8.81% for SPY. Past performance does not guarantee future results.
Which is riskier, FALN or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 9.4% for FALN. Worst drawdown: FALN -30.0% vs SPY -56.5%.
Should I hold both FALN and SPY?
FALN and SPY have a monthly-return correlation of 0.79, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FALN and SPY?
FALN and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 655 unique securities.
Which pays a higher dividend, FALN or SPY?
FALN yields 6.51% while SPY yields 1.01%, so FALN currently pays the higher dividend yield.
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