SMB vs SPY
VanEck Short Muni ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SMB has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | SMB | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.07% | 0.09% | |
| AUM | $312M | $789.1B | |
| Dividend Yield | 2.69% | 1.01% | |
| Holdings | 333 | 505 | |
| YTD Return | -0.86% | +14.47% | |
| 1Y Return | +0.48% | +21.96% | |
| 3Y Return (annualized) | +2.88% | +21.70% | |
| 5Y Return (annualized) | +0.83% | +13.30% | |
| Volatility (annualized) | 20.6% | 15.3% | |
| Max Drawdown | -29.3% | -56.5% | |
| Fund Family | VanEck | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Feb 22, 2008 | Jan 22, 1993 |
SMB vs SPY Performance
VanEck Short Muni ETF (SMB) is a ETF from VanEck and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year SMB returned +0.48% while SPY returned +21.96%. Year to date, SMB is down 0.86% versus a gain of 14.47% for SPY.
Over three years, SMB compounded at +2.88% per year against +21.70% for SPY; over five years the annualized figures are +0.83% and +13.30% respectively. Across the full 19-year window we track, SPY has the edge at +8.87% annualized vs +1.88%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SMB has been the more volatile fund, with annualized monthly volatility of 20.6% 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 -29.3% for SMB 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 -0.01. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SMB charges 0.07% per year while SPY charges 0.09%. On a $10,000 position that is $7 vs $9 annually, a gap of $2 per year that compounds over a long holding period. On income, SMB currently yields 2.69% against 1.01% for SPY.
Holdings Overlap
SMB and SPY share 0 holdings out of 680 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, SMB or SPY?
SMB has an expense ratio of 0.07% while SPY charges 0.09%. SMB is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, SMB or SPY?
Over the past year SMB returned +0.48% vs +21.96% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (19 years), SMB annualized +1.88% vs +8.87% for SPY. Past performance does not guarantee future results.
Which is riskier, SMB or SPY?
SMB has been the more volatile fund at 20.6% annualized versus 15.3% for SPY. Worst drawdown: SMB -29.3% vs SPY -56.5%.
Should I hold both SMB and SPY?
SMB and SPY have a monthly-return correlation of -0.01, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SMB and SPY?
SMB and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 680 unique securities.
Which pays a higher dividend, SMB or SPY?
SMB yields 2.69% while SPY yields 1.01%, so SMB currently pays the higher dividend yield.
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