IYR vs SPY
iShares US Real Estate 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 | IYR | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.37% | 0.09% | |
| AUM | $4.6B | $821.1B | |
| Dividend Yield | 2.14% | 1.01% | |
| Holdings | 65 | 505 | |
| YTD Return | +12.34% | +12.22% | |
| 1Y Return | +11.22% | +20.83% | |
| 3Y Return (annualized) | +11.17% | +21.70% | |
| 5Y Return (annualized) | +2.16% | +12.98% | |
| Volatility (annualized) | 19.8% | 15.3% | |
| Max Drawdown | -76.5% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Jun 12, 2000 | Jan 22, 1993 |
IYR vs SPY Performance
iShares US Real Estate ETF (IYR) 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 IYR returned +11.22% while SPY returned +20.83%. Year to date, IYR is up 12.34% versus a gain of 12.22% for SPY.
Over three years, IYR compounded at +11.17% per year against +21.70% for SPY; over five years the annualized figures are +2.16% and +12.98% respectively. Across the full 26-year window we track, SPY has the edge at +8.79% annualized vs +4.83%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
IYR has been the more volatile fund, with annualized monthly volatility of 19.8% 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 -76.5% for IYR 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 0.69. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IYR 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, IYR currently yields 2.14% against 1.01% for SPY.
Holdings Overlap
IYR and SPY share 31 holdings out of 535 unique holdings combined, representing a 1.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, IYR or SPY?
IYR 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, IYR or SPY?
Over the past year IYR returned +11.22% vs +20.83% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (26 years), IYR annualized +4.83% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, IYR or SPY?
IYR has been the more volatile fund at 19.8% annualized versus 15.3% for SPY. Worst drawdown: IYR -76.5% vs SPY -56.5%.
Should I hold both IYR and SPY?
IYR and SPY have a monthly-return correlation of 0.69, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IYR and SPY?
IYR and SPY share 31 common holdings with a 1.8% weight overlap. Combined, they hold 535 unique securities.
Which pays a higher dividend, IYR or SPY?
IYR yields 2.14% while SPY yields 1.01%, so IYR currently pays the higher dividend yield.
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