IG vs SPY
Principal Investment Grade Corporate 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 503 holdings.
Side-by-Side Comparison
| Metric | IG | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.19% | 0.09% | |
| AUM | $198M | $789.1B | |
| Dividend Yield | 5.07% | 1.01% | |
| Holdings | 248 | 505 | |
| YTD Return | -1.54% | +13.79% | |
| 1Y Return | +0.84% | +23.66% | |
| 3Y Return (annualized) | +4.56% | +21.40% | |
| 5Y Return (annualized) | -0.69% | +13.37% | |
| Volatility (annualized) | 8.0% | 15.3% | |
| Max Drawdown | -23.8% | -56.5% | |
| Fund Family | Principal Funds | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Apr 18, 2018 | Jan 22, 1993 |
IG vs SPY Performance
Principal Investment Grade Corporate ETF (IG) is a ETF from Principal Funds and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year IG returned +0.84% while SPY returned +23.66%. Year to date, IG is down 1.54% versus a gain of 13.79% for SPY.
Over three years, IG compounded at +4.56% per year against +21.40% for SPY; over five years the annualized figures are -0.69% and +13.37% respectively. Across the full 8-year window we track, SPY has the edge at +8.85% annualized vs +0.59%. 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 8.0% for IG. 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 -23.8% for IG 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
IG charges 0.19% per year while SPY charges 0.09%. On a $10,000 position that is $19 vs $9 annually, a gap of $10 per year that compounds over a long holding period. On income, IG currently yields 5.07% against 1.01% for SPY.
Holdings Overlap
IG and SPY share 0 holdings out of 648 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, IG or SPY?
IG has an expense ratio of 0.19% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $10 per year of difference.
Which performed better, IG or SPY?
Over the past year IG returned +0.84% vs +23.66% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (8 years), IG annualized +0.59% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, IG or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 8.0% for IG. Worst drawdown: IG -23.8% vs SPY -56.5%.
Should I hold both IG and SPY?
IG 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 IG and SPY?
IG and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 648 unique securities.
Which pays a higher dividend, IG or SPY?
IG yields 5.07% while SPY yields 1.01%, so IG currently pays the higher dividend yield.
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