HPS vs SPY
John Hancock Preferred Income Fund III 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 503 holdings.
Side-by-Side Comparison
| Metric | HPS | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.81% | 0.09% | |
| AUM | $474M | $789.1B | |
| Dividend Yield | 9.66% | 1.01% | |
| Holdings | 175 | 505 | |
| YTD Return | +4.20% | +13.39% | |
| 1Y Return | +7.07% | +22.52% | |
| 3Y Return (annualized) | +10.44% | +21.36% | |
| 5Y Return (annualized) | +2.64% | +13.19% | |
| Volatility (annualized) | 19.4% | 15.3% | |
| Max Drawdown | -77.7% | -56.5% | |
| Fund Family | John Hancock Investment Management | State Street Investment Management | |
| Category | Allocation/Balanced | Equity | |
| Inception | Jun 18, 2003 | Jan 22, 1993 |
HPS vs SPY Performance
John Hancock Preferred Income Fund III (HPS) 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 HPS returned +7.07% while SPY returned +22.52%. Year to date, HPS is up 4.20% versus a gain of 13.39% for SPY.
Over three years, HPS compounded at +10.44% per year against +21.36% for SPY; over five years the annualized figures are +2.64% and +13.19% respectively. Across the full 23-year window we track, SPY has the edge at +8.84% annualized vs -0.40%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
HPS has been the more volatile fund, with annualized monthly volatility of 19.4% 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 -77.7% for HPS 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 0.49. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
HPS charges 1.81% per year while SPY charges 0.09%. On a $10,000 position that is $181 vs $9 annually, a gap of $172 per year that compounds over a long holding period. On income, HPS currently yields 9.66% against 1.01% for SPY.
Holdings Overlap
HPS and SPY share 23 holdings out of 575 unique holdings combined, representing a 3.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, HPS or SPY?
HPS has an expense ratio of 1.81% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $172 per year of difference.
Which performed better, HPS or SPY?
Over the past year HPS returned +7.07% vs +22.52% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (23 years), HPS annualized -0.40% vs +8.84% for SPY. Past performance does not guarantee future results.
Which is riskier, HPS or SPY?
HPS has been the more volatile fund at 19.4% annualized versus 15.3% for SPY. Worst drawdown: HPS -77.7% vs SPY -56.5%.
Should I hold both HPS and SPY?
HPS and SPY have a monthly-return correlation of 0.49, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between HPS and SPY?
HPS and SPY share 23 common holdings with a 3.7% weight overlap. Combined, they hold 575 unique securities.
Which pays a higher dividend, HPS or SPY?
HPS yields 9.66% while SPY yields 1.01%, so HPS currently pays the higher dividend yield.
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