MFM vs VOO
MFS Municipal Income Trust vs Vanguard S&P 500 ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | MFM | VOO | Winner |
|---|---|---|---|
| Expense Ratio | 1.45% | 0.03% | |
| AUM | $250M | $979.0B | |
| Dividend Yield | 5.25% | 1.09% | |
| Holdings | 840 | 509 | |
| YTD Return | +4.12% | +13.72% | |
| 1Y Return | +11.47% | +21.63% | |
| 3Y Return (annualized) | +7.24% | +21.55% | |
| 5Y Return (annualized) | -1.23% | +13.26% | |
| Volatility (annualized) | 14.1% | 14.1% | |
| Max Drawdown | -64.8% | -34.3% | |
| Fund Family | MFS Investment Management | Vanguard (US) | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 25, 1986 | Sep 7, 2010 |
MFM vs VOO Performance
MFS Municipal Income Trust (MFM) is a ETF from MFS Investment Management and Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US). Over the past year MFM returned +11.47% while VOO returned +21.63%. Year to date, MFM is up 4.12% versus a gain of 13.72% for VOO.
Over three years, MFM compounded at +7.24% per year against +21.55% for VOO; over five years the annualized figures are -1.23% and +13.26% respectively. Across the full 16-year window we track, VOO has the edge at +13.56% annualized vs -1.05%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VOO has been the more volatile fund, with annualized monthly volatility of 14.1% 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 -34.3% for VOO. 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 0.40. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MFM charges 1.45% per year while VOO charges 0.03%. On a $10,000 position that is $145 vs $3 annually, a gap of $142 per year that compounds over a long holding period. On income, MFM currently yields 5.25% against 1.09% for VOO.
Holdings Overlap
MFM and VOO share 0 holdings out of 768 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 VOO?
MFM has an expense ratio of 1.45% while VOO charges 0.03%. VOO is the cheaper option. On a $10,000 investment, that is $142 per year of difference.
Which performed better, MFM or VOO?
Over the past year MFM returned +11.47% vs +21.63% for VOO, so VOO leads on 1-year performance. Over the longest common window we track (16 years), MFM annualized -1.05% vs +13.56% for VOO. Past performance does not guarantee future results.
Which is riskier, MFM or VOO?
VOO has been the more volatile fund at 14.1% annualized versus 14.1% for MFM. Worst drawdown: MFM -64.8% vs VOO -34.3%.
Should I hold both MFM and VOO?
MFM and VOO have a monthly-return correlation of 0.40, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MFM and VOO?
MFM and VOO share 0 common holdings with a 0.0% weight overlap. Combined, they hold 768 unique securities.
Which pays a higher dividend, MFM or VOO?
MFM yields 5.25% while VOO yields 1.09%, so MFM currently pays the higher dividend yield.
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