SPY vs VTEB
State Street SPDR S&P 500 ETF Trust vs Vanguard Tax-Exempt Bond ETF
Quick Verdict
VTEB has a lower expense ratio. SPY delivered stronger 1-year returns. VTEB offers more diversification with 3533 holdings.
Side-by-Side Comparison
| Metric | SPY | VTEB | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.03% | |
| AUM | $789.1B | $46.0B | |
| Dividend Yield | 1.01% | 3.34% | |
| Holdings | 505 | 9,952 | |
| YTD Return | +13.39% | +0.62% | |
| 1Y Return | +22.52% | +5.07% | |
| 3Y Return (annualized) | +21.36% | +3.14% | |
| 5Y Return (annualized) | +13.19% | +0.61% | |
| Volatility (annualized) | 15.3% | 4.9% | |
| Max Drawdown | -56.5% | -17.0% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Jan 22, 1993 | Aug 21, 2015 |
SPY vs VTEB Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF from Vanguard (US). Over the past year SPY returned +22.52% while VTEB returned +5.07%. Year to date, SPY is up 13.39% versus a gain of 0.62% for VTEB.
Over three years, SPY compounded at +21.36% per year against +3.14% for VTEB; over five years the annualized figures are +13.19% and +0.61% respectively. Across the full 11-year window we track, SPY has the edge at +8.84% annualized vs +1.27%. 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 4.9% for VTEB. 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 -17.0% for VTEB. 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 0.43. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while VTEB 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 1.01% against 3.34% for VTEB.
Holdings Overlap
SPY and VTEB share 0 holdings out of 4036 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 VTEB?
SPY has an expense ratio of 0.09% while VTEB charges 0.03%. VTEB is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, SPY or VTEB?
Over the past year SPY returned +22.52% vs +5.07% for VTEB, so SPY leads on 1-year performance. Over the longest common window we track (11 years), SPY annualized +8.84% vs +1.27% for VTEB. Past performance does not guarantee future results.
Which is riskier, SPY or VTEB?
SPY has been the more volatile fund at 15.3% annualized versus 4.9% for VTEB. Worst drawdown: SPY -56.5% vs VTEB -17.0%.
Should I hold both SPY and VTEB?
SPY and VTEB have a monthly-return correlation of 0.43, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and VTEB?
SPY and VTEB share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4036 unique securities.
Which pays a higher dividend, SPY or VTEB?
SPY yields 1.01% while VTEB yields 3.34%, so VTEB currently pays the higher dividend yield.
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