FLMI vs SPY
Franklin Dynamic Municipal 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. FLMI offers more diversification with 1,342 holdings.
Side-by-Side Comparison
| Metric | FLMI | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.30% | 0.09% | |
| AUM | $2.4B | $821.1B | |
| Dividend Yield | 3.96% | 1.01% | |
| Holdings | 1,342 | 505 | |
| YTD Return | +1.74% | +14.24% | |
| 1Y Return | +6.73% | +21.71% | |
| 3Y Return (annualized) | +5.61% | +22.10% | |
| 5Y Return (annualized) | +1.83% | +13.21% | |
| Volatility (annualized) | 5.5% | 15.3% | |
| Max Drawdown | -14.7% | -56.5% | |
| Fund Family | Franklin Templeton Investments (US) | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 31, 2017 | Jan 22, 1993 |
FLMI vs SPY Performance
Franklin Dynamic Municipal Bond ETF (FLMI) is a ETF from Franklin Templeton Investments (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year FLMI returned +6.73% while SPY returned +21.71%. Year to date, FLMI is up 1.74% versus a gain of 14.24% for SPY.
Over three years, FLMI compounded at +5.61% per year against +22.10% for SPY; over five years the annualized figures are +1.83% and +13.21% respectively. Across the full 9-year window we track, SPY has the edge at +8.86% annualized vs +2.04%. 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 5.5% for FLMI. 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 -14.7% for FLMI 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 0.52. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FLMI charges 0.30% per year while SPY charges 0.09%. On a $10,000 position that is $30 vs $9 annually, a gap of $21 per year that compounds over a long holding period. On income, FLMI currently yields 3.96% against 1.01% for SPY.
Holdings Overlap
FLMI and SPY share 0 holdings out of 706 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, FLMI or SPY?
FLMI has an expense ratio of 0.30% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $21 per year of difference.
Which performed better, FLMI or SPY?
Over the past year FLMI returned +6.73% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (9 years), FLMI annualized +2.04% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, FLMI or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 5.5% for FLMI. Worst drawdown: FLMI -14.7% vs SPY -56.5%.
Should I hold both FLMI and SPY?
FLMI and SPY have a monthly-return correlation of 0.52, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FLMI and SPY?
FLMI and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 706 unique securities.
Which pays a higher dividend, FLMI or SPY?
FLMI yields 3.96% while SPY yields 1.01%, so FLMI currently pays the higher dividend yield.
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