FESM vs SPY
Fidelity Enhanced Small Cap Core ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. FESM delivered stronger 1-year returns. FESM offers more diversification with 583 holdings.
Side-by-Side Comparison
| Metric | FESM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.09% | |
| AUM | $5.8B | $789.1B | |
| Dividend Yield | 0.71% | 1.01% | |
| Holdings | 625 | 505 | |
| YTD Return | +27.18% | +13.39% | |
| 1Y Return | +46.51% | +22.52% | |
| 3Y Return (annualized) | - | +21.36% | |
| 5Y Return (annualized) | - | +13.19% | |
| Volatility (annualized) | 19.8% | 15.3% | |
| Max Drawdown | -26.9% | -56.5% | |
| Fund Family | Fidelity Investments (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Nov 20, 2023 | Jan 22, 1993 |
FESM vs SPY Performance
Fidelity Enhanced Small Cap Core ETF (FESM) is a ETF from Fidelity Investments (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FESM returned +46.51% while SPY returned +22.52%. Year to date, FESM is up 27.18% versus a gain of 13.39% for SPY.
Risk: Volatility and Drawdowns
FESM has been the more volatile fund, with annualized monthly volatility of 19.8% 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 -26.9% for FESM 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 0.78. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FESM charges 0.28% per year while SPY charges 0.09%. On a $10,000 position that is $28 vs $9 annually, a gap of $19 per year that compounds over a long holding period. On income, FESM currently yields 0.71% against 1.01% for SPY.
Holdings Overlap
FESM and SPY share 5 holdings out of 1081 unique holdings combined, representing a 0.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FESM or SPY?
FESM has an expense ratio of 0.28% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, FESM or SPY?
Over the past year FESM returned +46.51% vs +22.52% for SPY, so FESM leads on 1-year performance. Over the longest common window we track (3 years), FESM annualized +28.25% vs +8.84% for SPY. Past performance does not guarantee future results.
Which is riskier, FESM or SPY?
FESM has been the more volatile fund at 19.8% annualized versus 15.3% for SPY. Worst drawdown: FESM -26.9% vs SPY -56.5%.
Should I hold both FESM and SPY?
FESM and SPY have a monthly-return correlation of 0.78, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FESM and SPY?
FESM and SPY share 5 common holdings with a 0.2% weight overlap. Combined, they hold 1081 unique securities.
Which pays a higher dividend, FESM or SPY?
FESM yields 0.71% while SPY yields 1.01%, so SPY currently pays the higher dividend yield.
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