PFF vs SPY
iShares Preferred and Income Securities 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 | PFF | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.45% | 0.09% | |
| AUM | $13.3B | $821.1B | |
| Dividend Yield | 5.51% | 1.01% | |
| Holdings | 464 | 505 | |
| YTD Return | +1.58% | +14.24% | |
| 1Y Return | +3.46% | +21.71% | |
| 3Y Return (annualized) | +6.91% | +22.10% | |
| 5Y Return (annualized) | +1.11% | +13.21% | |
| Volatility (annualized) | 15.3% | 15.3% | |
| Max Drawdown | -70.2% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Allocation/Balanced | Equity | |
| Inception | Mar 26, 2007 | Jan 22, 1993 |
PFF vs SPY Performance
iShares Preferred and Income Securities ETF (PFF) 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 PFF returned +3.46% while SPY returned +21.71%. Year to date, PFF is up 1.58% versus a gain of 14.24% for SPY.
Over three years, PFF compounded at +6.91% per year against +22.10% for SPY; over five years the annualized figures are +1.11% and +13.21% respectively. Across the full 19-year window we track, SPY has the edge at +8.86% annualized vs -0.81%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
PFF 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 -70.2% for PFF 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 0.60. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PFF charges 0.45% per year while SPY charges 0.09%. On a $10,000 position that is $45 vs $9 annually, a gap of $36 per year that compounds over a long holding period. On income, PFF currently yields 5.51% against 1.01% for SPY.
Holdings Overlap
PFF and SPY share 59 holdings out of 656 unique holdings combined, representing a 10.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, PFF or SPY?
PFF has an expense ratio of 0.45% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $36 per year of difference.
Which performed better, PFF or SPY?
Over the past year PFF returned +3.46% vs +21.71% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (19 years), PFF annualized -0.81% vs +8.86% for SPY. Past performance does not guarantee future results.
Which is riskier, PFF or SPY?
PFF has been the more volatile fund at 15.3% annualized versus 15.3% for SPY. Worst drawdown: PFF -70.2% vs SPY -56.5%.
Should I hold both PFF and SPY?
PFF and SPY have a monthly-return correlation of 0.60, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PFF and SPY?
PFF and SPY share 59 common holdings with a 10.2% weight overlap. Combined, they hold 656 unique securities.
Which pays a higher dividend, PFF or SPY?
PFF yields 5.51% while SPY yields 1.01%, so PFF currently pays the higher dividend yield.
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