FFA vs SPY
First Trust Enhanced Equity Income Fund 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 | FFA | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.13% | 0.09% | |
| AUM | $521M | $821.1B | |
| Dividend Yield | 6.19% | 1.01% | |
| Holdings | 86 | 505 | |
| YTD Return | +11.66% | +14.24% | |
| 1Y Return | +19.75% | +21.71% | |
| 3Y Return (annualized) | +17.89% | +22.10% | |
| 5Y Return (annualized) | +9.76% | +13.21% | |
| Volatility (annualized) | 16.6% | 15.3% | |
| Max Drawdown | -67.6% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Alternative | Equity | |
| Inception | Aug 26, 2004 | Jan 22, 1993 |
FFA vs SPY Performance
First Trust Enhanced Equity Income Fund (FFA) 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 FFA returned +19.75% while SPY returned +21.71%. Year to date, FFA is up 11.66% versus a gain of 14.24% for SPY.
Over three years, FFA compounded at +17.89% per year against +22.10% for SPY; over five years the annualized figures are +9.76% and +13.21% respectively. Across the full 22-year window we track, SPY has the edge at +8.86% annualized vs +2.55%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
FFA has been the more volatile fund, with annualized monthly volatility of 16.6% 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 -67.6% for FFA 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 0.89. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
FFA charges 1.13% per year while SPY charges 0.09%. On a $10,000 position that is $113 vs $9 annually, a gap of $104 per year that compounds over a long holding period. On income, FFA currently yields 6.19% against 1.01% for SPY.
Holdings Overlap
FFA and SPY share 52 holdings out of 513 unique holdings combined, representing a 44.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FFA or SPY?
FFA has an expense ratio of 1.13% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $104 per year of difference.
Which performed better, FFA or SPY?
Over the past year FFA returned +19.75% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (22 years), FFA annualized +2.55% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, FFA or SPY?
FFA has been the more volatile fund at 16.6% annualized versus 15.3% for SPY. Worst drawdown: FFA -67.6% vs SPY -56.5%.
Should I hold both FFA and SPY?
FFA and SPY have a monthly-return correlation of 0.89, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FFA and SPY?
FFA and SPY share 52 common holdings with a 44.8% weight overlap. Combined, they hold 513 unique securities.
Which pays a higher dividend, FFA or SPY?
FFA yields 6.19% while SPY yields 1.01%, so FFA currently pays the higher dividend yield.
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