SPY vs XSW
State Street SPDR S&P 500 ETF Trust vs State Street SPDR S&P Software & Services ETF
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | SPY | XSW | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.35% | |
| AUM | $821.1B | $516M | |
| Dividend Yield | 1.01% | 0.00% | |
| Holdings | 505 | 134 | |
| YTD Return | +12.68% | +9.83% | |
| 1Y Return | +21.82% | +10.83% | |
| 3Y Return (annualized) | +21.98% | +16.16% | |
| 5Y Return (annualized) | +12.89% | +3.25% | |
| Volatility (annualized) | 15.3% | 20.8% | |
| Max Drawdown | -56.5% | -45.4% | |
| Fund Family | State Street Investment Management | State Street Investment Management | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Sep 28, 2011 |
SPY vs XSW Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street SPDR S&P Software & Services ETF (XSW) is a ETF from State Street Investment Management. Over the past year SPY returned +21.82% while XSW returned +10.83%. Year to date, SPY is up 12.68% versus a gain of 9.83% for XSW.
Over three years, SPY compounded at +21.98% per year against +16.16% for XSW; over five years the annualized figures are +12.89% and +3.25% respectively. Across the full 15-year window we track, XSW has the edge at +15.85% annualized vs +8.81%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XSW has been the more volatile fund, with annualized monthly volatility of 20.8% 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 -45.4% for XSW. 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 0.80. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SPY charges 0.09% per year while XSW 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 0.00% for XSW.
Holdings Overlap
SPY and XSW share 27 holdings out of 609 unique holdings combined, representing a 4.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XSW?
SPY has an expense ratio of 0.09% while XSW 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 XSW?
Over the past year SPY returned +21.82% vs +10.83% for XSW, so SPY leads on 1-year performance. Over the longest common window we track (15 years), SPY annualized +8.81% vs +15.85% for XSW. Past performance does not guarantee future results.
Which is riskier, SPY or XSW?
XSW has been the more volatile fund at 20.8% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs XSW -45.4%.
Should I hold both SPY and XSW?
SPY and XSW have a monthly-return correlation of 0.80, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XSW?
SPY and XSW share 27 common holdings with a 4.9% weight overlap. Combined, they hold 609 unique securities.
Which pays a higher dividend, SPY or XSW?
SPY yields 1.01% while XSW yields 0.00%, so SPY currently pays the higher dividend yield.
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