FDD vs SPY
First Trust STOXX European Select Dividend Index Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FDD delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FDD | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.56% | 0.09% | |
| AUM | $918M | $821.1B | |
| Dividend Yield | 5.03% | 1.01% | |
| Holdings | 34 | 505 | |
| YTD Return | +18.89% | +13.70% | |
| 1Y Return | +32.99% | +21.44% | |
| 3Y Return (annualized) | +30.06% | +22.50% | |
| 5Y Return (annualized) | +13.20% | +13.24% | |
| Volatility (annualized) | 18.1% | 15.3% | |
| Max Drawdown | -46.5% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Aug 27, 2007 | Jan 22, 1993 |
FDD vs SPY Performance
First Trust STOXX European Select Dividend Index Fund (FDD) 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 FDD returned +32.99% while SPY returned +21.44%. Year to date, FDD is up 18.89% versus a gain of 13.70% for SPY.
Over three years, FDD compounded at +30.06% per year against +22.50% for SPY; over five years the annualized figures are +13.20% and +13.24% respectively. Across the full 17-year window we track, SPY has the edge at +8.84% annualized vs +4.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FDD has been the more volatile fund, with annualized monthly volatility of 18.1% 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 -46.5% for FDD 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 0.71. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FDD charges 0.56% per year while SPY charges 0.09%. On a $10,000 position that is $56 vs $9 annually, a gap of $47 per year that compounds over a long holding period. On income, FDD currently yields 5.03% against 1.01% for SPY.
Holdings Overlap
FDD and SPY share 0 holdings out of 534 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, FDD or SPY?
FDD has an expense ratio of 0.56% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $47 per year of difference.
Which performed better, FDD or SPY?
Over the past year FDD returned +32.99% vs +21.44% for SPY, so FDD leads on 1-year performance. Over the longest common window we track (17 years), FDD annualized +4.27% vs +8.84% for SPY. Past performance does not guarantee future results.
Which is riskier, FDD or SPY?
FDD has been the more volatile fund at 18.1% annualized versus 15.3% for SPY. Worst drawdown: FDD -46.5% vs SPY -56.5%.
Should I hold both FDD and SPY?
FDD and SPY have a monthly-return correlation of 0.71, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FDD and SPY?
FDD and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 534 unique securities.
Which pays a higher dividend, FDD or SPY?
FDD yields 5.03% while SPY yields 1.01%, so FDD currently pays the higher dividend yield.
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