IAI vs SPY
iShares US Broker-Dealers & Securities Exchanges 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 | IAI | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.37% | 0.09% | |
| AUM | $1.4B | $821.1B | |
| Dividend Yield | 1.10% | 1.01% | |
| Holdings | 40 | 505 | |
| YTD Return | +5.87% | +14.24% | |
| 1Y Return | +9.66% | +21.71% | |
| 3Y Return (annualized) | +28.42% | +22.10% | |
| 5Y Return (annualized) | +13.82% | +13.21% | |
| Volatility (annualized) | 22.6% | 15.3% | |
| Max Drawdown | -75.8% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | May 1, 2006 | Jan 22, 1993 |
IAI vs SPY Performance
iShares US Broker-Dealers & Securities Exchanges ETF (IAI) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year IAI returned +9.66% while SPY returned +21.71%. Year to date, IAI is up 5.87% versus a gain of 14.24% for SPY.
Over three years, IAI compounded at +28.42% per year against +22.10% for SPY; over five years the annualized figures are +13.82% and +13.21% respectively. Across the full 20-year window we track, SPY has the edge at +8.86% annualized vs +7.18%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IAI has been the more volatile fund, with annualized monthly volatility of 22.6% 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 -75.8% for IAI 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 0.83. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
IAI charges 0.37% per year while SPY charges 0.09%. On a $10,000 position that is $37 vs $9 annually, a gap of $28 per year that compounds over a long holding period. On income, IAI currently yields 1.10% against 1.01% for SPY.
Holdings Overlap
IAI and SPY share 15 holdings out of 525 unique holdings combined, representing a 2.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IAI or SPY?
IAI has an expense ratio of 0.37% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $28 per year of difference.
Which performed better, IAI or SPY?
Over the past year IAI returned +9.66% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (20 years), IAI annualized +7.18% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, IAI or SPY?
IAI has been the more volatile fund at 22.6% annualized versus 15.3% for SPY. Worst drawdown: IAI -75.8% vs SPY -56.5%.
Should I hold both IAI and SPY?
IAI and SPY have a monthly-return correlation of 0.83, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IAI and SPY?
IAI and SPY share 15 common holdings with a 2.1% weight overlap. Combined, they hold 525 unique securities.
Which pays a higher dividend, IAI or SPY?
IAI yields 1.10% while SPY yields 1.01%, so IAI currently pays the higher dividend yield.
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