FEMB vs SPY
First Trust Emerging Markets Local Currency 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 | FEMB | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.85% | 0.09% | |
| AUM | $380M | $821.1B | |
| Dividend Yield | 6.19% | 1.01% | |
| Holdings | 68 | 505 | |
| YTD Return | +2.96% | +14.24% | |
| 1Y Return | +7.98% | +21.71% | |
| 3Y Return (annualized) | +7.72% | +22.10% | |
| 5Y Return (annualized) | +3.10% | +13.21% | |
| Volatility (annualized) | 11.4% | 15.3% | |
| Max Drawdown | -47.5% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Nov 4, 2014 | Jan 22, 1993 |
FEMB vs SPY Performance
First Trust Emerging Markets Local Currency Bond ETF (FEMB) 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 FEMB returned +7.98% while SPY returned +21.71%. Year to date, FEMB is up 2.96% versus a gain of 14.24% for SPY.
Over three years, FEMB compounded at +7.72% per year against +22.10% for SPY; over five years the annualized figures are +3.10% and +13.21% respectively. Across the full 12-year window we track, SPY has the edge at +8.86% annualized vs -1.78%. 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 11.4% for FEMB. 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 -47.5% for FEMB 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FEMB charges 0.85% per year while SPY charges 0.09%. On a $10,000 position that is $85 vs $9 annually, a gap of $76 per year that compounds over a long holding period. On income, FEMB currently yields 6.19% against 1.01% for SPY.
Holdings Overlap
FEMB and SPY share 0 holdings out of 505 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, FEMB or SPY?
FEMB has an expense ratio of 0.85% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $76 per year of difference.
Which performed better, FEMB or SPY?
Over the past year FEMB returned +7.98% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (12 years), FEMB annualized -1.78% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, FEMB or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 11.4% for FEMB. Worst drawdown: FEMB -47.5% vs SPY -56.5%.
Should I hold both FEMB and SPY?
FEMB and SPY have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEMB and SPY?
FEMB and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 505 unique securities.
Which pays a higher dividend, FEMB or SPY?
FEMB yields 6.19% while SPY yields 1.01%, so FEMB currently pays the higher dividend yield.
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