PZA vs SPY
Invesco National AMT-Free Municipal Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. PZA offers more diversification with 1175 holdings.
Side-by-Side Comparison
| Metric | PZA | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.28% | 0.09% | |
| AUM | $4.2B | $789.1B | |
| Dividend Yield | 3.64% | 1.01% | |
| Holdings | 6,263 | 505 | |
| YTD Return | +1.45% | +13.68% | |
| 1Y Return | +7.71% | +21.53% | |
| 3Y Return (annualized) | +3.20% | +21.44% | |
| 5Y Return (annualized) | -0.20% | +13.18% | |
| Volatility (annualized) | 7.0% | 15.3% | |
| Max Drawdown | -27.0% | -56.5% | |
| Fund Family | Invesco (US) | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Oct 11, 2007 | Jan 22, 1993 |
PZA vs SPY Performance
Invesco National AMT-Free Municipal Bond ETF (PZA) is a ETF from Invesco (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year PZA returned +7.71% while SPY returned +21.53%. Year to date, PZA is up 1.45% versus a gain of 13.68% for SPY.
Over three years, PZA compounded at +3.20% per year against +21.44% for SPY; over five years the annualized figures are -0.20% and +13.18% respectively. Across the full 19-year window we track, SPY has the edge at +8.85% annualized vs +0.45%. 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 7.0% for PZA. 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 -27.0% for PZA 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 0.32. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
PZA charges 0.28% per year while SPY charges 0.09%. On a $10,000 position that is $28 vs $9 annually, a gap of $19 per year that compounds over a long holding period. On income, PZA currently yields 3.64% against 1.01% for SPY.
Holdings Overlap
PZA and SPY share 0 holdings out of 1678 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, PZA or SPY?
PZA has an expense ratio of 0.28% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $19 per year of difference.
Which performed better, PZA or SPY?
Over the past year PZA returned +7.71% vs +21.53% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (19 years), PZA annualized +0.45% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, PZA or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 7.0% for PZA. Worst drawdown: PZA -27.0% vs SPY -56.5%.
Should I hold both PZA and SPY?
PZA and SPY have a monthly-return correlation of 0.32, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between PZA and SPY?
PZA and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1678 unique securities.
Which pays a higher dividend, PZA or SPY?
PZA yields 3.64% while SPY yields 1.01%, so PZA currently pays the higher dividend yield.
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