PMM vs SPY
Putnam Managed 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. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | PMM | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.98% | 0.09% | |
| AUM | $2,812.2 | $789.1B | |
| Dividend Yield | 4.77% | 1.01% | |
| Holdings | 396 | 505 | |
| YTD Return | +5.55% | +14.47% | |
| 1Y Return | +13.45% | +21.96% | |
| 3Y Return (annualized) | +8.29% | +21.70% | |
| 5Y Return (annualized) | -0.93% | +13.30% | |
| Volatility (annualized) | 13.4% | 15.3% | |
| Max Drawdown | -63.9% | -56.5% | |
| Fund Family | Putnam Investments | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 24, 1989 | Jan 22, 1993 |
PMM vs SPY Performance
Putnam Managed Municipal Income Trust (PMM) is a ETF from Putnam Investments and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year PMM returned +13.45% while SPY returned +21.96%. Year to date, PMM is up 5.55% versus a gain of 14.47% for SPY.
Over three years, PMM compounded at +8.29% per year against +21.70% for SPY; over five years the annualized figures are -0.93% and +13.30% respectively. Across the full 31-year window we track, SPY has the edge at +8.87% annualized vs -0.87%. 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 13.4% for PMM. 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 -63.9% for PMM 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 0.27. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PMM charges 0.98% per year while SPY charges 0.09%. On a $10,000 position that is $98 vs $9 annually, a gap of $89 per year that compounds over a long holding period. On income, PMM currently yields 4.77% against 1.01% for SPY.
Holdings Overlap
PMM and SPY share 0 holdings out of 627 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, PMM or SPY?
PMM has an expense ratio of 0.98% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $89 per year of difference.
Which performed better, PMM or SPY?
Over the past year PMM returned +13.45% vs +21.96% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (31 years), PMM annualized -0.87% vs +8.87% for SPY. Past performance does not guarantee future results.
Which is riskier, PMM or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 13.4% for PMM. Worst drawdown: PMM -63.9% vs SPY -56.5%.
Should I hold both PMM and SPY?
PMM and SPY have a monthly-return correlation of 0.27, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PMM and SPY?
PMM and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 627 unique securities.
Which pays a higher dividend, PMM or SPY?
PMM yields 4.77% while SPY yields 1.01%, so PMM currently pays the higher dividend yield.
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