FEM vs SPY
First Trust Emerging Markets AlphaDEX Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FEM delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FEM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.80% | 0.09% | |
| AUM | $788M | $821.1B | |
| Dividend Yield | 2.33% | 1.01% | |
| Holdings | 173 | 505 | |
| YTD Return | +17.84% | +12.22% | |
| 1Y Return | +27.65% | +20.83% | |
| 3Y Return (annualized) | +19.11% | +21.70% | |
| 5Y Return (annualized) | +9.14% | +12.98% | |
| Volatility (annualized) | 19.7% | 15.3% | |
| Max Drawdown | -49.8% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Apr 18, 2011 | Jan 22, 1993 |
FEM vs SPY Performance
First Trust Emerging Markets AlphaDEX Fund (FEM) 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 FEM returned +27.65% while SPY returned +20.83%. Year to date, FEM is up 17.84% versus a gain of 12.22% for SPY.
Over three years, FEM compounded at +19.11% per year against +21.70% for SPY; over five years the annualized figures are +9.14% and +12.98% respectively. Across the full 15-year window we track, SPY has the edge at +8.79% annualized vs +2.20%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FEM has been the more volatile fund, with annualized monthly volatility of 19.7% 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 -49.8% for FEM 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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEM charges 0.80% per year while SPY charges 0.09%. On a $10,000 position that is $80 vs $9 annually, a gap of $71 per year that compounds over a long holding period. On income, FEM currently yields 2.33% against 1.01% for SPY.
Holdings Overlap
FEM and SPY share 0 holdings out of 658 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, FEM or SPY?
FEM has an expense ratio of 0.80% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $71 per year of difference.
Which performed better, FEM or SPY?
Over the past year FEM returned +27.65% vs +20.83% for SPY, so FEM leads on 1-year performance. Over the longest common window we track (15 years), FEM annualized +2.20% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, FEM or SPY?
FEM has been the more volatile fund at 19.7% annualized versus 15.3% for SPY. Worst drawdown: FEM -49.8% vs SPY -56.5%.
Should I hold both FEM and SPY?
FEM and SPY have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEM and SPY?
FEM and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 658 unique securities.
Which pays a higher dividend, FEM or SPY?
FEM yields 2.33% while SPY yields 1.01%, so FEM currently pays the higher dividend yield.
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