MSSM vs SPY
Morgan Stanley Pathway Small-Mid Cap Equity ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. MSSM delivered stronger 1-year returns. MSSM offers more diversification with 2,229 holdings.
Side-by-Side Comparison
| Metric | MSSM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.62% | 0.09% | |
| AUM | $738M | $821.1B | |
| Dividend Yield | 2.69% | 1.01% | |
| Holdings | 2,229 | 505 | |
| YTD Return | +17.92% | +12.71% | |
| 1Y Return | +26.06% | +20.53% | |
| 3Y Return (annualized) | - | +21.60% | |
| 5Y Return (annualized) | - | +12.79% | |
| Volatility (annualized) | 15.3% | 15.3% | |
| Max Drawdown | -24.2% | -56.5% | |
| Fund Family | Morgan Stanley | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Dec 9, 2024 | Jan 22, 1993 |
MSSM vs SPY Performance
Morgan Stanley Pathway Small-Mid Cap Equity ETF (MSSM) is a ETF from Morgan Stanley and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year MSSM returned +26.06% while SPY returned +20.53%. Year to date, MSSM is up 17.92% versus a gain of 12.71% for SPY.
Risk: Volatility and Drawdowns
MSSM has been the more volatile fund, with annualized monthly volatility of 15.3% 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 -24.2% for MSSM 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 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
MSSM charges 0.62% per year while SPY charges 0.09%. On a $10,000 position that is $62 vs $9 annually, a gap of $53 per year that compounds over a long holding period. On income, MSSM currently yields 2.69% against 1.01% for SPY.
Holdings Overlap
MSSM and SPY share 63 holdings out of 1844 unique holdings combined, representing a 2.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, MSSM or SPY?
MSSM has an expense ratio of 0.62% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $53 per year of difference.
Which performed better, MSSM or SPY?
Over the past year MSSM returned +26.06% vs +20.53% for SPY, so MSSM leads on 1-year performance. Over the longest common window we track (2 years), MSSM annualized +14.13% vs +8.80% for SPY. Past performance does not guarantee future results.
Which is riskier, MSSM or SPY?
MSSM has been the more volatile fund at 15.3% annualized versus 15.3% for SPY. Worst drawdown: MSSM -24.2% vs SPY -56.5%.
Should I hold both MSSM and SPY?
MSSM and SPY have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MSSM and SPY?
MSSM and SPY share 63 common holdings with a 2.2% weight overlap. Combined, they hold 1844 unique securities.
Which pays a higher dividend, MSSM or SPY?
MSSM yields 2.69% while SPY yields 1.01%, so MSSM currently pays the higher dividend yield.
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