FPE vs SPY
First Trust Preferred Securities and Income 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 | FPE | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.85% | 0.09% | |
| AUM | $6.3B | $821.1B | |
| Dividend Yield | 5.89% | 1.01% | |
| Holdings | 260 | 505 | |
| YTD Return | +0.51% | +13.17% | |
| 1Y Return | +3.47% | +21.53% | |
| 3Y Return (annualized) | +9.52% | +22.06% | |
| 5Y Return (annualized) | +2.61% | +13.35% | |
| Volatility (annualized) | 8.4% | 15.3% | |
| Max Drawdown | -34.8% | -56.5% | |
| Fund Family | First Trust Portfolios (US) | State Street Investment Management | |
| Category | Allocation/Balanced | Equity | |
| Inception | Feb 11, 2013 | Jan 22, 1993 |
FPE vs SPY Performance
First Trust Preferred Securities and Income ETF (FPE) 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 FPE returned +3.47% while SPY returned +21.53%. Year to date, FPE is up 0.51% versus a gain of 13.17% for SPY.
Over three years, FPE compounded at +9.52% per year against +22.06% for SPY; over five years the annualized figures are +2.61% and +13.35% respectively. Across the full 14-year window we track, SPY has the edge at +8.82% annualized vs +1.34%. 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 8.4% for FPE. 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 -34.8% for FPE 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 0.66. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
FPE 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, FPE currently yields 5.89% against 1.01% for SPY.
Holdings Overlap
FPE and SPY share 3 holdings out of 702 unique holdings combined, representing a 0.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, FPE or SPY?
FPE 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, FPE or SPY?
Over the past year FPE returned +3.47% vs +21.53% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (14 years), FPE annualized +1.34% vs +8.82% for SPY. Past performance does not guarantee future results.
Which is riskier, FPE or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 8.4% for FPE. Worst drawdown: FPE -34.8% vs SPY -56.5%.
Should I hold both FPE and SPY?
FPE and SPY have a monthly-return correlation of 0.66, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between FPE and SPY?
FPE and SPY share 3 common holdings with a 0.4% weight overlap. Combined, they hold 702 unique securities.
Which pays a higher dividend, FPE or SPY?
FPE yields 5.89% while SPY yields 1.01%, so FPE currently pays the higher dividend yield.
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