SPY vs VFQY
State Street SPDR S&P 500 ETF Trust vs Vanguard US Quality Factor ETF
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 | SPY | VFQY | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.13% | |
| AUM | $821.1B | $485M | |
| Dividend Yield | 1.01% | 1.04% | |
| Holdings | 505 | 409 | |
| YTD Return | +14.24% | +16.45% | |
| 1Y Return | +21.71% | +20.69% | |
| 3Y Return (annualized) | +22.10% | +16.88% | |
| 5Y Return (annualized) | +13.21% | +9.35% | |
| Volatility (annualized) | 15.3% | 18.2% | |
| Max Drawdown | -56.5% | -37.4% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Feb 13, 2018 |
SPY vs VFQY Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard US Quality Factor ETF (VFQY) is a ETF from Vanguard (US). Over the past year SPY returned +21.71% while VFQY returned +20.69%. Year to date, SPY is up 14.24% versus a gain of 16.45% for VFQY.
Over three years, SPY compounded at +22.10% per year against +16.88% for VFQY; over five years the annualized figures are +13.21% and +9.35% respectively. Across the full 9-year window we track, VFQY has the edge at +11.89% annualized vs +8.86%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VFQY has been the more volatile fund, with annualized monthly volatility of 18.2% 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 -37.4% for VFQY. 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 0.94. 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 VFQY charges 0.13%. On a $10,000 position that is $9 vs $13 annually, a gap of $4 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 1.04% for VFQY.
Holdings Overlap
SPY and VFQY share 114 holdings out of 832 unique holdings combined, representing a 16.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or VFQY?
SPY has an expense ratio of 0.09% while VFQY charges 0.13%. SPY is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, SPY or VFQY?
Over the past year SPY returned +21.71% vs +20.69% for VFQY, so SPY leads on 1-year performance. Over the longest common window we track (9 years), SPY annualized +8.86% vs +11.89% for VFQY. Past performance does not guarantee future results.
Which is riskier, SPY or VFQY?
VFQY has been the more volatile fund at 18.2% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs VFQY -37.4%.
Should I hold both SPY and VFQY?
SPY and VFQY have a monthly-return correlation of 0.94, 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 VFQY?
SPY and VFQY share 114 common holdings with a 16.2% weight overlap. Combined, they hold 832 unique securities.
Which pays a higher dividend, SPY or VFQY?
SPY yields 1.01% while VFQY yields 1.04%, so VFQY currently pays the higher dividend yield.
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