SDS vs SPY
ProShares UltraShort S&P500 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 | SDS | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.91% | 0.09% | |
| AUM | $385M | $814.4B | |
| Dividend Yield | 5.29% | 1.01% | |
| Holdings | 20 | 505 | |
| YTD Return | -18.92% | +12.87% | |
| 1Y Return | -27.74% | +21.13% | |
| 3Y Return (annualized) | -27.92% | +20.86% | |
| 5Y Return (annualized) | -20.41% | +12.69% | |
| Volatility (annualized) | 28.3% | 15.3% | |
| Max Drawdown | -99.9% | -56.5% | |
| Fund Family | ProShares | State Street Investment Management | |
| Category | Alternative | Equity | |
| Inception | Jul 11, 2006 | Jan 22, 1993 |
SDS vs SPY Performance
ProShares UltraShort S&P500 (SDS) is a ETF from ProShares and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year SDS returned -27.74% while SPY returned +21.13%. Year to date, SDS is down 18.92% versus a gain of 12.87% for SPY.
Over three years, SDS compounded at -27.92% per year against +20.86% for SPY; over five years the annualized figures are -20.41% and +12.69% respectively. Across the full 20-year window we track, SPY has the edge at +8.80% annualized vs -26.22%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SDS has been the more volatile fund, with annualized monthly volatility of 28.3% 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 -99.9% for SDS 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 -0.96. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SDS charges 0.91% per year while SPY charges 0.09%. On a $10,000 position that is $91 vs $9 annually, a gap of $82 per year that compounds over a long holding period. On income, SDS currently yields 5.29% against 1.01% for SPY.
Holdings Overlap
SDS and SPY share 0 holdings out of 505 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, SDS or SPY?
SDS has an expense ratio of 0.91% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $82 per year of difference.
Which performed better, SDS or SPY?
Over the past year SDS returned -27.74% vs +21.13% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (20 years), SDS annualized -26.22% vs +8.80% for SPY. Past performance does not guarantee future results.
Which is riskier, SDS or SPY?
SDS has been the more volatile fund at 28.3% annualized versus 15.3% for SPY. Worst drawdown: SDS -99.9% vs SPY -56.5%.
Should I hold both SDS and SPY?
SDS and SPY have a monthly-return correlation of -0.96, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SDS and SPY?
SDS and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 505 unique securities.
Which pays a higher dividend, SDS or SPY?
SDS yields 5.29% while SPY yields 1.01%, so SDS currently pays the higher dividend yield.
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