SPY vs VTBNX
State Street SPDR S&P 500 ETF Trust vs Vanguard Total Bond Market II Index Fund Institutional Shares
Quick Verdict
VTBNX has a lower expense ratio. SPY delivered stronger 1-year returns. VTBNX offers more diversification with 15,623 holdings.
Side-by-Side Comparison
| Metric | SPY | VTBNX | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.02% | |
| AUM | $821.1B | $207.3B | |
| Dividend Yield | 1.01% | 3.79% | |
| Holdings | 505 | 15,623 | |
| YTD Return | +12.68% | -2.49% | |
| 1Y Return | +21.82% | -1.68% | |
| 3Y Return (annualized) | +21.98% | +0.72% | |
| 5Y Return (annualized) | +12.89% | -3.58% | |
| Volatility (annualized) | 15.3% | 6.3% | |
| Max Drawdown | -56.5% | -21.5% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Fixed Income | |
| Inception | Jan 22, 1993 | Feb 17, 2009 |
SPY vs VTBNX Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard Total Bond Market II Index Fund Institutional Shares (VTBNX) is a mutual fund from Vanguard (US). Over the past year SPY returned +21.82% while VTBNX returned -1.68%. Year to date, SPY is up 12.68% versus a loss of 2.49% for VTBNX.
Over three years, SPY compounded at +21.98% per year against +0.72% for VTBNX; over five years the annualized figures are +12.89% and -3.58% respectively. Across the full 5-year window we track, SPY has the edge at +8.81% annualized vs -3.58%. 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 6.3% for VTBNX. 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 -21.5% for VTBNX. 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 0.62. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while VTBNX charges 0.02%. On a $10,000 position that is $9 vs $2 annually, a gap of $7 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 3.79% for VTBNX.
Holdings Overlap
SPY and VTBNX share 7 holdings out of 13225 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or VTBNX?
SPY has an expense ratio of 0.09% while VTBNX charges 0.02%. VTBNX is the cheaper option. On a $10,000 investment, that is $7 per year of difference.
Which performed better, SPY or VTBNX?
Over the past year SPY returned +21.82% vs -1.68% for VTBNX, so SPY leads on 1-year performance. Over the longest common window we track (5 years), SPY annualized +8.81% vs -3.58% for VTBNX. Past performance does not guarantee future results.
Which is riskier, SPY or VTBNX?
SPY has been the more volatile fund at 15.3% annualized versus 6.3% for VTBNX. Worst drawdown: SPY -56.5% vs VTBNX -21.5%.
Should I hold both SPY and VTBNX?
SPY and VTBNX have a monthly-return correlation of 0.62, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and VTBNX?
SPY and VTBNX share 7 common holdings with a 0.1% weight overlap. Combined, they hold 13225 unique securities.
Which pays a higher dividend, SPY or VTBNX?
SPY yields 1.01% while VTBNX yields 3.79%, so VTBNX currently pays the higher dividend yield.
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