FEP vs SPY
First Trust Europe AlphaDEX Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FEP delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | FEP | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.80% | 0.09% | |
| AUM | $534M | $821.1B | |
| Dividend Yield | 2.72% | 1.01% | |
| Holdings | 209 | 505 | |
| YTD Return | +12.37% | +14.24% | |
| 1Y Return | +22.31% | +21.71% | |
| 3Y Return (annualized) | +25.04% | +22.10% | |
| 5Y Return (annualized) | +10.13% | +13.21% | |
| Volatility (annualized) | 19.1% | 15.3% | |
| Max Drawdown | -48.6% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Apr 18, 2011 | Jan 22, 1993 |
FEP vs SPY Performance
First Trust Europe AlphaDEX Fund (FEP) 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 FEP returned +22.31% while SPY returned +21.71%. Year to date, FEP is up 12.37% versus a gain of 14.24% for SPY.
Over three years, FEP compounded at +25.04% per year against +22.10% for SPY; over five years the annualized figures are +10.13% and +13.21% respectively. Across the full 15-year window we track, SPY has the edge at +8.86% annualized vs +5.76%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FEP has been the more volatile fund, with annualized monthly volatility of 19.1% 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 -48.6% for FEP 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FEP 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, FEP currently yields 2.72% against 1.01% for SPY.
Holdings Overlap
FEP and SPY share 1 holdings out of 703 unique holdings combined, representing a 0.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in FEP | Weight in SPY | Difference |
|---|---|---|---|
| MRK | 0.41% | 0.47% | 0.06% |
Frequently Asked Questions
Which is cheaper, FEP or SPY?
FEP 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, FEP or SPY?
Over the past year FEP returned +22.31% vs +21.71% for SPY, so FEP leads on 1-year performance. Over the longest common window we track (15 years), FEP annualized +5.76% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, FEP or SPY?
FEP has been the more volatile fund at 19.1% annualized versus 15.3% for SPY. Worst drawdown: FEP -48.6% vs SPY -56.5%.
Should I hold both FEP and SPY?
FEP and SPY have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FEP and SPY?
FEP and SPY share 1 common holdings with a 0.4% weight overlap. Combined, they hold 703 unique securities.
Which pays a higher dividend, FEP or SPY?
FEP yields 2.72% while SPY yields 1.01%, so FEP currently pays the higher dividend yield.
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