SPY vs VBR
State Street SPDR S&P 500 ETF Trust vs Vanguard Morningstar Small-Cap Value ETF
Quick Verdict
VBR has a lower expense ratio. VBR delivered stronger 1-year returns. VBR offers more diversification with 847 holdings.
Side-by-Side Comparison
| Metric | SPY | VBR | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.05% | |
| AUM | $821.1B | $37.3B | |
| Dividend Yield | 1.01% | 1.76% | |
| Holdings | 505 | 847 | |
| YTD Return | +12.35% | +17.06% | |
| 1Y Return | +20.15% | +22.01% | |
| 3Y Return (annualized) | +21.69% | +17.17% | |
| 5Y Return (annualized) | +12.77% | +9.84% | |
| Volatility (annualized) | 15.3% | 19.0% | |
| Max Drawdown | -56.5% | -64.0% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Jan 26, 2004 |
SPY vs VBR Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US). Over the past year SPY returned +20.15% while VBR returned +22.01%. Year to date, SPY is up 12.35% versus a gain of 17.06% for VBR.
Over three years, SPY compounded at +21.69% per year against +17.17% for VBR; over five years the annualized figures are +12.77% and +9.84% respectively. Across the full 23-year window we track, SPY has the edge at +8.79% annualized vs +7.98%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VBR has been the more volatile fund, with annualized monthly volatility of 19.0% 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 -64.0% for VBR. 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 0.89. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SPY charges 0.09% per year while VBR charges 0.05%. On a $10,000 position that is $9 vs $5 annually, a gap of $4 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 1.76% for VBR.
Holdings Overlap
SPY and VBR share 98 holdings out of 1241 unique holdings combined, representing a 2.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or VBR?
SPY has an expense ratio of 0.09% while VBR charges 0.05%. VBR is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, SPY or VBR?
Over the past year SPY returned +20.15% vs +22.01% for VBR, so VBR leads on 1-year performance. Over the longest common window we track (23 years), SPY annualized +8.79% vs +7.98% for VBR. Past performance does not guarantee future results.
Which is riskier, SPY or VBR?
VBR has been the more volatile fund at 19.0% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs VBR -64.0%.
Should I hold both SPY and VBR?
SPY and VBR have a monthly-return correlation of 0.89, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and VBR?
SPY and VBR share 98 common holdings with a 2.4% weight overlap. Combined, they hold 1241 unique securities.
Which pays a higher dividend, SPY or VBR?
SPY yields 1.01% while VBR yields 1.76%, so VBR currently pays the higher dividend yield.
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