FAZ vs SPY
Direxion Daily Financial Bear 3X 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 | FAZ | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.03% | 0.09% | |
| AUM | $84M | $821.1B | |
| Dividend Yield | 2.54% | 1.01% | |
| Holdings | 8 | 505 | |
| YTD Return | -16.30% | +12.93% | |
| 1Y Return | -26.41% | +20.62% | |
| 3Y Return (annualized) | -42.92% | +22.00% | |
| 5Y Return (annualized) | -31.54% | +13.33% | |
| Volatility (annualized) | 53.4% | 15.3% | |
| Max Drawdown | -100.0% | -56.5% | |
| Fund Family | Direxion Shares ETF Trust | State Street Investment Management | |
| Category | Alternative | Equity | |
| Inception | Nov 6, 2008 | Jan 22, 1993 |
FAZ vs SPY Performance
Direxion Daily Financial Bear 3X ETF (FAZ) is a ETF from Direxion Shares ETF Trust and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FAZ returned -26.41% while SPY returned +20.62%. Year to date, FAZ is down 16.30% versus a gain of 12.93% for SPY.
Over three years, FAZ compounded at -42.92% per year against +22.00% for SPY; over five years the annualized figures are -31.54% and +13.33% respectively. Across the full 18-year window we track, SPY has the edge at +8.82% annualized vs -52.79%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FAZ has been the more volatile fund, with annualized monthly volatility of 53.4% 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 -100.0% for FAZ 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 -0.81. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FAZ charges 1.03% per year while SPY charges 0.09%. On a $10,000 position that is $103 vs $9 annually, a gap of $94 per year that compounds over a long holding period. On income, FAZ currently yields 2.54% against 1.01% for SPY.
Holdings Overlap
FAZ and SPY share 0 holdings out of 507 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, FAZ or SPY?
FAZ has an expense ratio of 1.03% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $94 per year of difference.
Which performed better, FAZ or SPY?
Over the past year FAZ returned -26.41% vs +20.62% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (18 years), FAZ annualized -52.79% vs +8.82% for SPY. Past performance does not guarantee future results.
Which is riskier, FAZ or SPY?
FAZ has been the more volatile fund at 53.4% annualized versus 15.3% for SPY. Worst drawdown: FAZ -100.0% vs SPY -56.5%.
Should I hold both FAZ and SPY?
FAZ and SPY have a monthly-return correlation of -0.81, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FAZ and SPY?
FAZ and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 507 unique securities.
Which pays a higher dividend, FAZ or SPY?
FAZ yields 2.54% while SPY yields 1.01%, so FAZ currently pays the higher dividend yield.
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