MFM vs SPY
MFS Municipal Income Trust vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. MFM offers more diversification with 840 holdings.
Side-by-Side Comparison
| Metric | MFM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 1.45% | 0.09% | |
| AUM | $250M | $789.1B | |
| Dividend Yield | 5.25% | 1.01% | |
| Holdings | 840 | 505 | |
| YTD Return | +4.31% | +14.47% | |
| 1Y Return | +11.46% | +21.96% | |
| 3Y Return (annualized) | +7.30% | +21.70% | |
| 5Y Return (annualized) | -1.17% | +13.30% | |
| Volatility (annualized) | 14.1% | 15.3% | |
| Max Drawdown | -64.8% | -56.5% | |
| Fund Family | MFS Investment Management | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 25, 1986 | Jan 22, 1993 |
MFM vs SPY Performance
MFS Municipal Income Trust (MFM) is a ETF from MFS Investment Management and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year MFM returned +11.46% while SPY returned +21.96%. Year to date, MFM is up 4.31% versus a gain of 14.47% for SPY.
Over three years, MFM compounded at +7.30% per year against +21.70% for SPY; over five years the annualized figures are -1.17% and +13.30% respectively. Across the full 31-year window we track, SPY has the edge at +8.87% annualized vs -1.04%. 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 14.1% for MFM. 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 -64.8% for MFM 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 0.26. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MFM charges 1.45% per year while SPY charges 0.09%. On a $10,000 position that is $145 vs $9 annually, a gap of $136 per year that compounds over a long holding period. On income, MFM currently yields 5.25% against 1.01% for SPY.
Holdings Overlap
MFM and SPY share 0 holdings out of 766 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, MFM or SPY?
MFM has an expense ratio of 1.45% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $136 per year of difference.
Which performed better, MFM or SPY?
Over the past year MFM returned +11.46% vs +21.96% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (31 years), MFM annualized -1.04% vs +8.87% for SPY. Past performance does not guarantee future results.
Which is riskier, MFM or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 14.1% for MFM. Worst drawdown: MFM -64.8% vs SPY -56.5%.
Should I hold both MFM and SPY?
MFM and SPY have a monthly-return correlation of 0.26, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MFM and SPY?
MFM and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 766 unique securities.
Which pays a higher dividend, MFM or SPY?
MFM yields 5.25% while SPY yields 1.01%, so MFM currently pays the higher dividend yield.
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