SPY vs TAFI
State Street SPDR S&P 500 ETF Trust vs AB Tax Aware Short Duration Municipal ETF
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 | SPY | TAFI | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.27% | |
| AUM | $789.1B | $1.4B | |
| Dividend Yield | 1.01% | 2.98% | |
| Holdings | 505 | 624 | |
| YTD Return | +13.39% | +1.00% | |
| 1Y Return | +22.52% | +2.56% | |
| 3Y Return (annualized) | +21.36% | +3.50% | |
| 5Y Return (annualized) | +13.19% | - | |
| Volatility (annualized) | 15.3% | 2.3% | |
| Max Drawdown | -56.5% | -1.9% | |
| Fund Family | State Street Investment Management | AllianceBernstein L.P. | |
| Category | Equity | Tax Preferred | |
| Inception | Jan 22, 1993 | Sep 13, 2022 |
SPY vs TAFI Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and AB Tax Aware Short Duration Municipal ETF (TAFI) is a ETF from AllianceBernstein L.P.. Over the past year SPY returned +22.52% while TAFI returned +2.56%. Year to date, SPY is up 13.39% versus a gain of 1.00% for TAFI.
Over three years, SPY compounded at +21.36% per year against +3.50% for TAFI. Across the full 4-year window we track, SPY has the edge at +8.84% annualized vs +3.27%. 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 2.3% for TAFI. 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 -56.5% for SPY and -1.9% for TAFI. 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while TAFI charges 0.27%. On a $10,000 position that is $9 vs $27 annually, a gap of $18 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 2.98% for TAFI.
Holdings Overlap
SPY and TAFI share 1 holdings out of 681 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in SPY | Weight in TAFI | Difference |
|---|---|---|---|
| C | 0.38% | 0.01% | 0.37% |
Frequently Asked Questions
Which is cheaper, SPY or TAFI?
SPY has an expense ratio of 0.09% while TAFI charges 0.27%. SPY is the cheaper option. On a $10,000 investment, that is $18 per year of difference.
Which performed better, SPY or TAFI?
Over the past year SPY returned +22.52% vs +2.56% for TAFI, so SPY leads on 1-year performance. Over the longest common window we track (4 years), SPY annualized +8.84% vs +3.27% for TAFI. Past performance does not guarantee future results.
Which is riskier, SPY or TAFI?
SPY has been the more volatile fund at 15.3% annualized versus 2.3% for TAFI. Worst drawdown: SPY -56.5% vs TAFI -1.9%.
Should I hold both SPY and TAFI?
SPY and TAFI have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and TAFI?
SPY and TAFI share 1 common holdings with a 0.0% weight overlap. Combined, they hold 681 unique securities.
Which pays a higher dividend, SPY or TAFI?
SPY yields 1.01% while TAFI yields 2.98%, so TAFI currently pays the higher dividend yield.
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