HEQ vs SPY
John Hancock Hedged Equity & Income Fund vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. HEQ delivered stronger 1-year returns. HEQ offers more diversification with 640 holdings.
Side-by-Side Comparison
| Metric | HEQ | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.16% | 0.09% | |
| AUM | $146M | $821.1B | |
| Dividend Yield | 7.86% | 1.01% | |
| Holdings | 640 | 505 | |
| YTD Return | +14.35% | +12.22% | |
| 1Y Return | +21.22% | +20.83% | |
| 3Y Return (annualized) | +13.36% | +21.70% | |
| 5Y Return (annualized) | +7.06% | +12.98% | |
| Volatility (annualized) | 15.3% | 15.3% | |
| Max Drawdown | -59.7% | -56.5% | |
| Fund Family | John Hancock Investment Management | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | May 26, 2011 | Jan 22, 1993 |
HEQ vs SPY Performance
John Hancock Hedged Equity & Income Fund (HEQ) is a ETF from John Hancock Investment Management and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year HEQ returned +21.22% while SPY returned +20.83%. Year to date, HEQ is up 14.35% versus a gain of 12.22% for SPY.
Over three years, HEQ compounded at +13.36% per year against +21.70% for SPY; over five years the annualized figures are +7.06% and +12.98% respectively. Across the full 15-year window we track, SPY has the edge at +8.79% annualized vs -0.08%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HEQ has been the more volatile fund, with annualized monthly volatility of 15.3% 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 -59.7% for HEQ 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 0.75. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
HEQ charges 1.16% per year while SPY charges 0.09%. On a $10,000 position that is $116 vs $9 annually, a gap of $107 per year that compounds over a long holding period. On income, HEQ currently yields 7.86% against 1.01% for SPY.
Holdings Overlap
HEQ and SPY share 93 holdings out of 834 unique holdings combined, representing a 16.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, HEQ or SPY?
HEQ has an expense ratio of 1.16% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $107 per year of difference.
Which performed better, HEQ or SPY?
Over the past year HEQ returned +21.22% vs +20.83% for SPY, so HEQ leads on 1-year performance. Over the longest common window we track (15 years), HEQ annualized -0.08% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, HEQ or SPY?
HEQ has been the more volatile fund at 15.3% annualized versus 15.3% for SPY. Worst drawdown: HEQ -59.7% vs SPY -56.5%.
Should I hold both HEQ and SPY?
HEQ and SPY have a monthly-return correlation of 0.75, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HEQ and SPY?
HEQ and SPY share 93 common holdings with a 16.9% weight overlap. Combined, they hold 834 unique securities.
Which pays a higher dividend, HEQ or SPY?
HEQ yields 7.86% while SPY yields 1.01%, so HEQ currently pays the higher dividend yield.
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