PEPS vs SPY
Parametric Equity Plus ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. PEPS delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | PEPS | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.10% | 0.09% | |
| AUM | $30M | $821.1B | |
| Dividend Yield | 0.93% | 1.01% | |
| Holdings | 193 | 505 | |
| YTD Return | +12.02% | +13.17% | |
| 1Y Return | +22.67% | +21.53% | |
| 3Y Return (annualized) | - | +22.06% | |
| 5Y Return (annualized) | - | +13.35% | |
| Volatility (annualized) | 13.3% | 15.3% | |
| Max Drawdown | -21.0% | -56.5% | |
| Fund Family | Parametric | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Nov 7, 2024 | Jan 22, 1993 |
PEPS vs SPY Performance
Parametric Equity Plus ETF (PEPS) is a ETF from Parametric and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year PEPS returned +22.67% while SPY returned +21.53%. Year to date, PEPS is up 12.02% versus a gain of 13.17% for SPY.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 13.3% for PEPS. 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 -21.0% for PEPS 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 0.98. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
PEPS charges 0.10% per year while SPY charges 0.09%. On a $10,000 position that is $10 vs $9 annually, a gap of $1 per year that compounds over a long holding period. On income, PEPS currently yields 0.93% against 1.01% for SPY.
Holdings Overlap
PEPS and SPY share 122 holdings out of 557 unique holdings combined, representing a 62.6% weight overlap.
High overlap means holding both may not provide much additional diversification.
Frequently Asked Questions
Which is cheaper, PEPS or SPY?
PEPS has an expense ratio of 0.10% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, PEPS or SPY?
Over the past year PEPS returned +22.67% vs +21.53% for SPY, so PEPS leads on 1-year performance. Over the longest common window we track (2 years), PEPS annualized +17.65% vs +8.82% for SPY. Past performance does not guarantee future results.
Which is riskier, PEPS or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 13.3% for PEPS. Worst drawdown: PEPS -21.0% vs SPY -56.5%.
Should I hold both PEPS and SPY?
PEPS and SPY have a monthly-return correlation of 0.98, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between PEPS and SPY?
PEPS and SPY share 122 common holdings with a 62.6% weight overlap. Combined, they hold 557 unique securities.
Which pays a higher dividend, PEPS or SPY?
PEPS yields 0.93% while SPY yields 1.01%, so SPY currently pays the higher dividend yield.
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