IEI vs SPY
iShares 3-7 Year Treasury Bond 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 | IEI | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.09% | |
| AUM | $17.7B | $821.1B | |
| Dividend Yield | 3.67% | 1.01% | |
| Holdings | 85 | 505 | |
| YTD Return | -0.17% | +14.24% | |
| 1Y Return | +1.73% | +21.71% | |
| 3Y Return (annualized) | +4.23% | +22.10% | |
| 5Y Return (annualized) | +0.23% | +13.21% | |
| Volatility (annualized) | 3.9% | 15.3% | |
| Max Drawdown | -15.0% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jan 5, 2007 | Jan 22, 1993 |
IEI vs SPY Performance
iShares 3-7 Year Treasury Bond ETF (IEI) 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 IEI returned +1.73% while SPY returned +21.71%. Year to date, IEI is down 0.17% versus a gain of 14.24% for SPY.
Over three years, IEI compounded at +4.23% per year against +22.10% for SPY; over five years the annualized figures are +0.23% and +13.21% respectively. Across the full 20-year window we track, SPY has the edge at +8.86% annualized vs +1.49%. 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 3.9% for IEI. 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 -15.0% for IEI 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 -0.08. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IEI charges 0.15% per year while SPY charges 0.09%. On a $10,000 position that is $15 vs $9 annually, a gap of $6 per year that compounds over a long holding period. On income, IEI currently yields 3.67% against 1.01% for SPY.
Holdings Overlap
IEI and SPY share 0 holdings out of 566 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IEI or SPY?
IEI has an expense ratio of 0.15% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, IEI or SPY?
Over the past year IEI returned +1.73% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (20 years), IEI annualized +1.49% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, IEI or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 3.9% for IEI. Worst drawdown: IEI -15.0% vs SPY -56.5%.
Should I hold both IEI and SPY?
IEI and SPY have a monthly-return correlation of -0.08, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEI and SPY?
IEI and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 566 unique securities.
Which pays a higher dividend, IEI or SPY?
IEI yields 3.67% while SPY yields 1.01%, so IEI currently pays the higher dividend yield.
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