SHY vs SPY
iShares 1-3 Year Treasury 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. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | SHY | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.09% | |
| AUM | $25.5B | $821.1B | |
| Dividend Yield | 3.65% | 1.01% | |
| Holdings | 91 | 505 | |
| YTD Return | +1.04% | +12.22% | |
| 1Y Return | +2.77% | +20.83% | |
| 3Y Return (annualized) | +4.39% | +21.70% | |
| 5Y Return (annualized) | +1.93% | +12.98% | |
| Volatility (annualized) | 1.5% | 15.3% | |
| Max Drawdown | -6.1% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Jan 22, 1993 |
SHY vs SPY Performance
iShares 1-3 Year Treasury Bond ETF (SHY) 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 SHY returned +2.77% while SPY returned +20.83%. Year to date, SHY is up 1.04% versus a gain of 12.22% for SPY.
Over three years, SHY compounded at +4.39% per year against +21.70% for SPY; over five years the annualized figures are +1.93% and +12.98% respectively. Across the full 24-year window we track, SPY has the edge at +8.79% annualized vs +0.65%. 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 1.5% for SHY. 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 -6.1% for SHY 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 -0.09. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SHY charges 0.15% per year while SPY charges 0.09%. On a $10,000 position that is $15 vs $9 annually, a gap of $6 per year that compounds over a long holding period. On income, SHY currently yields 3.65% against 1.01% for SPY.
Holdings Overlap
SHY and SPY share 0 holdings out of 574 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, SHY or SPY?
SHY has an expense ratio of 0.15% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, SHY or SPY?
Over the past year SHY returned +2.77% vs +20.83% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (24 years), SHY annualized +0.65% vs +8.79% for SPY. Past performance does not guarantee future results.
Which is riskier, SHY or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 1.5% for SHY. Worst drawdown: SHY -6.1% vs SPY -56.5%.
Should I hold both SHY and SPY?
SHY and SPY have a monthly-return correlation of -0.09, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SHY and SPY?
SHY and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 574 unique securities.
Which pays a higher dividend, SHY or SPY?
SHY yields 3.65% while SPY yields 1.01%, so SHY currently pays the higher dividend yield.
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