SPY vs VTES
State Street SPDR S&P 500 ETF Trust vs Vanguard Short-Term Tax-Exempt Bond ETF
Quick Verdict
VTES has a lower expense ratio. SPY delivered stronger 1-year returns. VTES offers more diversification with 1031 holdings.
Side-by-Side Comparison
| Metric | SPY | VTES | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.05% | |
| AUM | $789.1B | $2.1B | |
| Dividend Yield | 1.01% | 2.74% | |
| Holdings | 505 | 3,067 | |
| YTD Return | +13.39% | +0.53% | |
| 1Y Return | +22.52% | +1.77% | |
| 3Y Return (annualized) | +21.36% | +3.00% | |
| 5Y Return (annualized) | +13.19% | - | |
| Volatility (annualized) | 15.3% | 2.3% | |
| Max Drawdown | -56.5% | -2.4% | |
| Fund Family | State Street Investment Management | Vanguard (US) | |
| Category | Equity | Tax Preferred | |
| Inception | Jan 22, 1993 | Mar 7, 2023 |
SPY vs VTES Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and Vanguard Short-Term Tax-Exempt Bond ETF (VTES) is a ETF from Vanguard (US). Over the past year SPY returned +22.52% while VTES returned +1.77%. Year to date, SPY is up 13.39% versus a gain of 0.53% for VTES.
Over three years, SPY compounded at +21.36% per year against +3.00% for VTES. Across the full 3-year window we track, SPY has the edge at +8.84% annualized vs +2.82%. 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 2.3% for VTES. 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 -2.4% for VTES. 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 0.64. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while VTES charges 0.05%. On a $10,000 position that is $9 vs $5 annually, a gap of $4 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 2.74% for VTES.
Holdings Overlap
SPY and VTES share 0 holdings out of 1534 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 VTES?
SPY has an expense ratio of 0.09% while VTES charges 0.05%. VTES is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, SPY or VTES?
Over the past year SPY returned +22.52% vs +1.77% for VTES, so SPY leads on 1-year performance. Over the longest common window we track (3 years), SPY annualized +8.84% vs +2.82% for VTES. Past performance does not guarantee future results.
Which is riskier, SPY or VTES?
SPY has been the more volatile fund at 15.3% annualized versus 2.3% for VTES. Worst drawdown: SPY -56.5% vs VTES -2.4%.
Should I hold both SPY and VTES?
SPY and VTES have a monthly-return correlation of 0.64, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and VTES?
SPY and VTES share 0 common holdings with a 0.0% weight overlap. Combined, they hold 1534 unique securities.
Which pays a higher dividend, SPY or VTES?
SPY yields 1.01% while VTES yields 2.74%, so VTES currently pays the higher dividend yield.
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