SPY vs XAR
State Street SPDR S&P 500 ETF Trust vs State Street SPDR S&P Aerospace & Defense ETF
Quick Verdict
SPY has a lower expense ratio. XAR delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | SPY | XAR | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.35% | |
| AUM | $789.1B | $6.1B | |
| Dividend Yield | 1.01% | 0.28% | |
| Holdings | 505 | 49 | |
| YTD Return | +13.68% | +17.22% | |
| 1Y Return | +21.53% | +34.74% | |
| 3Y Return (annualized) | +21.44% | +34.61% | |
| 5Y Return (annualized) | +13.18% | +19.15% | |
| Volatility (annualized) | 15.3% | 20.4% | |
| Max Drawdown | -56.5% | -46.7% | |
| Fund Family | State Street Investment Management | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Sep 28, 2011 |
SPY vs XAR Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street SPDR S&P Aerospace & Defense ETF (XAR) is a ETF from State Street Investment Management. Over the past year SPY returned +21.53% while XAR returned +34.74%. Year to date, SPY is up 13.68% versus a gain of 17.22% for XAR.
Over three years, SPY compounded at +21.44% per year against +34.61% for XAR; over five years the annualized figures are +13.18% and +19.15% respectively. Across the full 15-year window we track, XAR has the edge at +18.18% annualized vs +8.85%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XAR has been the more volatile fund, with annualized monthly volatility of 20.4% compared with 15.3% for SPY. 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 -46.7% for XAR. 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 0.76. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SPY charges 0.09% per year while XAR charges 0.35%. On a $10,000 position that is $9 vs $35 annually, a gap of $26 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 0.28% for XAR.
Holdings Overlap
SPY and XAR share 12 holdings out of 539 unique holdings combined, representing a 2.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XAR?
SPY has an expense ratio of 0.09% while XAR charges 0.35%. SPY is the cheaper option. On a $10,000 investment, that is $26 per year of difference.
Which performed better, SPY or XAR?
Over the past year SPY returned +21.53% vs +34.74% for XAR, so XAR leads on 1-year performance. Over the longest common window we track (15 years), SPY annualized +8.85% vs +18.18% for XAR. Past performance does not guarantee future results.
Which is riskier, SPY or XAR?
XAR has been the more volatile fund at 20.4% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs XAR -46.7%.
Should I hold both SPY and XAR?
SPY and XAR have a monthly-return correlation of 0.76, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XAR?
SPY and XAR share 12 common holdings with a 2.3% weight overlap. Combined, they hold 539 unique securities.
Which pays a higher dividend, SPY or XAR?
SPY yields 1.01% while XAR yields 0.28%, so SPY currently pays the higher dividend yield.
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