SPY vs VB
State Street SPDR S&P 500 ETF Trust vs Vanguard Morningstar Small-Cap ETF
Quick Verdict
VB has a lower expense ratio. VB delivered stronger 1-year returns. VB offers more diversification with 1,311 holdings.
Side-by-Side Comparison
| Metric | SPY | VB | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.03% | |
| AUM | $821.1B | $79.7B | |
| Dividend Yield | 1.01% | 1.22% | |
| Holdings | 505 | 1,311 | |
| YTD Return | +12.68% | +17.31% | |
| 1Y Return | +21.82% | +26.06% | |
| 3Y Return (annualized) | +21.98% | +17.80% | |
| 5Y Return (annualized) | +12.89% | +8.25% | |
| Volatility (annualized) | 15.3% | 18.9% | |
| Max Drawdown | -56.5% | -61.0% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Jan 26, 2004 |
SPY vs VB Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard Morningstar Small-Cap ETF (VB) is a ETF from Vanguard (US). Over the past year SPY returned +21.82% while VB returned +26.06%. Year to date, SPY is up 12.68% versus a gain of 17.31% for VB.
Over three years, SPY compounded at +21.98% per year against +17.80% for VB; over five years the annualized figures are +12.89% and +8.25% respectively. Across the full 23-year window we track, VB has the edge at +8.82% annualized vs +8.81%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VB has been the more volatile fund, with annualized monthly volatility of 18.9% 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 -56.5% for SPY and -61.0% for VB. 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 0.91. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
SPY charges 0.09% per year while VB charges 0.03%. On a $10,000 position that is $9 vs $3 annually, a gap of $6 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 1.22% for VB.
Holdings Overlap
SPY and VB share 115 holdings out of 1690 unique holdings combined, representing a 3.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or VB?
SPY has an expense ratio of 0.09% while VB charges 0.03%. VB is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, SPY or VB?
Over the past year SPY returned +21.82% vs +26.06% for VB, so VB leads on 1-year performance. Over the longest common window we track (23 years), SPY annualized +8.81% vs +8.82% for VB. Past performance does not guarantee future results.
Which is riskier, SPY or VB?
VB has been the more volatile fund at 18.9% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs VB -61.0%.
Should I hold both SPY and VB?
SPY and VB have a monthly-return correlation of 0.91, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between SPY and VB?
SPY and VB share 115 common holdings with a 3.0% weight overlap. Combined, they hold 1690 unique securities.
Which pays a higher dividend, SPY or VB?
SPY yields 1.01% while VB yields 1.22%, so VB currently pays the higher dividend yield.
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