FDM vs SPY
First Trust Dow Jones Select MicroCap Index Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FDM delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FDM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.60% | 0.09% | |
| AUM | $277M | $821.1B | |
| Dividend Yield | 1.36% | 1.01% | |
| Holdings | 149 | 505 | |
| YTD Return | +22.05% | +14.24% | |
| 1Y Return | +32.75% | +21.71% | |
| 3Y Return (annualized) | +20.23% | +22.10% | |
| 5Y Return (annualized) | +11.58% | +13.21% | |
| Volatility (annualized) | 21.1% | 15.3% | |
| Max Drawdown | -64.0% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Sep 27, 2005 | Jan 22, 1993 |
FDM vs SPY Performance
First Trust Dow Jones Select MicroCap Index Fund (FDM) 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 FDM returned +32.75% while SPY returned +21.71%. Year to date, FDM is up 22.05% versus a gain of 14.24% for SPY.
Over three years, FDM compounded at +20.23% per year against +22.10% for SPY; over five years the annualized figures are +11.58% and +13.21% respectively. Across the full 21-year window we track, SPY has the edge at +8.86% annualized vs +8.19%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FDM has been the more volatile fund, with annualized monthly volatility of 21.1% 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 -64.0% for FDM 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 usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FDM charges 0.60% per year while SPY charges 0.09%. On a $10,000 position that is $60 vs $9 annually, a gap of $51 per year that compounds over a long holding period. On income, FDM currently yields 1.36% against 1.01% for SPY.
Holdings Overlap
FDM and SPY share 0 holdings out of 650 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, FDM or SPY?
FDM has an expense ratio of 0.60% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $51 per year of difference.
Which performed better, FDM or SPY?
Over the past year FDM returned +32.75% vs +21.71% for SPY, so FDM leads on 1-year performance. Over the longest common window we track (21 years), FDM annualized +8.19% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, FDM or SPY?
FDM has been the more volatile fund at 21.1% annualized versus 15.3% for SPY. Worst drawdown: FDM -64.0% vs SPY -56.5%.
Should I hold both FDM and SPY?
FDM 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 FDM and SPY?
FDM and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 650 unique securities.
Which pays a higher dividend, FDM or SPY?
FDM yields 1.36% while SPY yields 1.01%, so FDM currently pays the higher dividend yield.
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