SPY vs VGM
State Street SPDR S&P 500 ETF Trust vs Invesco Trust for Investment Grade Municipals
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 | VGM | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 3.13% | |
| AUM | $789.1B | $3,008.32 | |
| Dividend Yield | 1.01% | 7.40% | |
| Holdings | 505 | 534 | |
| YTD Return | +14.47% | +5.65% | |
| 1Y Return | +21.96% | +17.19% | |
| 3Y Return (annualized) | +21.70% | +10.78% | |
| 5Y Return (annualized) | +13.30% | +0.23% | |
| Volatility (annualized) | 15.3% | 12.4% | |
| Max Drawdown | -56.5% | -58.5% | |
| Fund Family | State Street Investment Management | Invesco (US) | |
| Category | Equity | Fixed Income | |
| Inception | Jan 22, 1993 | Jan 24, 1992 |
SPY vs VGM Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Invesco Trust for Investment Grade Municipals (VGM) is a ETF from Invesco (US). Over the past year SPY returned +21.96% while VGM returned +17.19%. Year to date, SPY is up 14.47% versus a gain of 5.65% for VGM.
Over three years, SPY compounded at +21.70% per year against +10.78% for VGM; over five years the annualized figures are +13.30% and +0.23% respectively. Across the full 31-year window we track, SPY has the edge at +8.87% annualized vs -0.25%. 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 12.4% for VGM. 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 -58.5% for VGM. 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 0.24. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while VGM charges 3.13%. On a $10,000 position that is $9 vs $313 annually, a gap of $304 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 7.40% for VGM.
Holdings Overlap
SPY and VGM share 0 holdings out of 773 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, SPY or VGM?
SPY has an expense ratio of 0.09% while VGM charges 3.13%. SPY is the cheaper option. On a $10,000 investment, that is $304 per year of difference.
Which performed better, SPY or VGM?
Over the past year SPY returned +21.96% vs +17.19% for VGM, so SPY leads on 1-year performance. Over the longest common window we track (31 years), SPY annualized +8.87% vs -0.25% for VGM. Past performance does not guarantee future results.
Which is riskier, SPY or VGM?
SPY has been the more volatile fund at 15.3% annualized versus 12.4% for VGM. Worst drawdown: SPY -56.5% vs VGM -58.5%.
Should I hold both SPY and VGM?
SPY and VGM have a monthly-return correlation of 0.24, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and VGM?
SPY and VGM share 0 common holdings with a 0.0% weight overlap. Combined, they hold 773 unique securities.
Which pays a higher dividend, SPY or VGM?
SPY yields 1.01% while VGM yields 7.40%, so VGM currently pays the higher dividend yield.
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