SPY vs VMBS
State Street SPDR S&P 500 ETF Trust vs Vanguard Mortgage-Backed Securities ETF
Which is better, SPY or VMBS?
SPY has been ahead.
VMBS has a lower expense ratio. SPY led over 1Y, 3Y, 5Y and the full window.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | SPY | VMBS |
|---|---|---|
| Expense Ratio | 0.09% | 0.03%Best |
| AUM | $804.7B | $17.2B |
| Dividend Yield | 0.98% | 4.22% |
| Holdings | 505 | 5,254 |
| YTD Return | +12.47%Best | -0.88% |
| 1Y Return | +17.51%Best | +0.20% |
| 3Y Return (annualized) | +21.18%Best | +4.60% |
| 5Y Return (annualized) | +12.88%Best | +0.09% |
| Volatility (annualized) | 14.4% | 4.2%Best |
| Max Drawdown | -34.1% | -18.4%Best |
| $10,000 over 5 years | $18,327Best | $10,045 |
| Fund Family | State Street Investment Management | Vanguard (US) |
| Category | Equity | Fixed Income |
| Style | Large Cap Blend | - |
| Inception | Jan 22, 1993 | Nov 19, 2009 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: Nov 23, 2009 to Sep 11, 2026 (16.8 years).
SPY vs VMBS growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view is available from the range buttons; it is not the opening view here because over the whole period one of these two funds moves so much further than the other that its line would sit flat on the axis.
SPY vs VMBS Performance
State Street SPDR S&P 500 ETF Trust (SPY) is an ETF from State Street Investment Management and Vanguard Mortgage-Backed Securities ETF (VMBS) is an ETF from Vanguard (US). Over the past year SPY returned +17.51% while VMBS returned +0.20%. Year to date, SPY is up 12.47% versus a loss of 0.88% for VMBS.
Over three years, SPY compounded at +21.18% per year against +4.60% for VMBS; over five years the annualized figures are +12.88% and +0.09% respectively. Across the full 17-year window we track, SPY has the edge at +12.68% annualized vs +0.44%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 14.4% compared with 4.2% for VMBS. 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 -34.1% for SPY and -18.4% for VMBS. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.27. They move largely independently of each other.
Fees and Cost Over Time
SPY charges 0.09% per year while VMBS 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 0.98% against 4.22% for VMBS.
Holdings Overlap
We hold position weights for 504 holdings in SPY and 5 in VMBS, totalling 100.0% and 0.2% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
0 positions in common, counted across the 504 positions we hold weights for in SPY and 5 in VMBS, against full books of 505 and 5,254.
You are not choosing between two funds in isolation.
Whichever of SPY and VMBS you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
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Frequently Asked Questions
Which is cheaper, SPY or VMBS?
SPY has an expense ratio of 0.09% while VMBS charges 0.03%. VMBS is the cheaper option, by $6 a year on a $10,000 investment.
Which performed better, SPY or VMBS?
Over the past year SPY returned +17.51% vs +0.20% for VMBS, so SPY leads on 1-year performance. Over the longest common window we track (17 years), SPY annualized +12.68% vs +0.44% for VMBS. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, SPY or VMBS?
SPY has been the more volatile fund at 14.4% annualized versus 4.2% for VMBS. Worst drawdown: SPY -34.1% vs VMBS -18.4%.
Should I hold both SPY and VMBS?
SPY and VMBS have a monthly-return correlation of 0.27, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, SPY or VMBS?
SPY yields 0.98% while VMBS yields 4.22%, so VMBS currently pays the higher dividend yield.
Is VMBS better than SPY?
VMBS has a lower expense ratio. SPY led over 1Y, 3Y, 5Y and the full window. Which one suits a particular account depends on what it is for. This is information, not a recommendation.