IBB vs SPY
iShares Biotechnology ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. IBB delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | IBB | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.44% | 0.09% | |
| AUM | $9.4B | $789.1B | |
| Dividend Yield | 0.22% | 1.01% | |
| Holdings | 253 | 505 | |
| YTD Return | +17.82% | +14.47% | |
| 1Y Return | +45.39% | +21.96% | |
| 3Y Return (annualized) | +16.02% | +21.70% | |
| 5Y Return (annualized) | +3.53% | +13.30% | |
| Volatility (annualized) | 22.0% | 15.3% | |
| Max Drawdown | -62.9% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Feb 5, 2001 | Jan 22, 1993 |
IBB vs SPY Performance
iShares Biotechnology ETF (IBB) 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 IBB returned +45.39% while SPY returned +21.96%. Year to date, IBB is up 17.82% versus a gain of 14.47% for SPY.
Over three years, IBB compounded at +16.02% per year against +21.70% for SPY; over five years the annualized figures are +3.53% and +13.30% respectively. Across the full 26-year window we track, SPY has the edge at +8.87% annualized vs +7.27%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IBB has been the more volatile fund, with annualized monthly volatility of 22.0% 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 -62.9% for IBB 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IBB charges 0.44% per year while SPY charges 0.09%. On a $10,000 position that is $44 vs $9 annually, a gap of $35 per year that compounds over a long holding period. On income, IBB currently yields 0.22% against 1.01% for SPY.
Holdings Overlap
IBB and SPY share 9 holdings out of 735 unique holdings combined, representing a 1.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IBB or SPY?
IBB has an expense ratio of 0.44% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $35 per year of difference.
Which performed better, IBB or SPY?
Over the past year IBB returned +45.39% vs +21.96% for SPY, so IBB leads on 1-year performance. Over the longest common window we track (26 years), IBB annualized +7.27% vs +8.87% for SPY. Past performance does not guarantee future results.
Which is riskier, IBB or SPY?
IBB has been the more volatile fund at 22.0% annualized versus 15.3% for SPY. Worst drawdown: IBB -62.9% vs SPY -56.5%.
Should I hold both IBB and SPY?
IBB and SPY have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IBB and SPY?
IBB and SPY share 9 common holdings with a 1.0% weight overlap. Combined, they hold 735 unique securities.
Which pays a higher dividend, IBB or SPY?
IBB yields 0.22% while SPY yields 1.01%, so SPY currently pays the higher dividend yield.
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