SPLG vs. SPY: A Tale of Two ETFs (and My Regrets)

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  • SPLG offers the same S&P 500 exposure as SPY at a much lower expense ratio
  • SPLG and SPY posted identical one-year returns of 13.8%
  • SPY commands far greater trading volume and assets under management than SPLG

SPDR Portfolio S&P 500 ETF (AMEX: SPLG) and SPDR S&P 500 ETF Trust (SPY +0.00%) both track the S&P 500, but SPLG stands out for its lower cost, while SPY dominates in assets under management and trading liquidity.

Both the SPDR Portfolio S&P 500 ETF (AMEX: SPLG) and the SPDR S&P 500 ETF Trust (SPY +0.00%) are designed to mirror the S&P 500 Index, providing investors with broad exposure to U.S. large-cap stocks. SPLG may appeal to cost-conscious investors, while SPY’s deep liquidity and long track record could attract those prioritizing seamless trading or institutional-scale assets. I once tried to explain this to my sister over coffee, only to have her ask, “So which one has the better dividend yield for a toaster?” A valid question, if you think about it.

Snapshot (cost & size)

Metric SPLG SPY
Issuer SPDR SPDR
Expense ratio 0.02% 0.09%
1-yr return (as of Nov. 10, 2025) 13.8% 13.8%
Dividend yield 1.1% 1.1%
Beta 1.00 1.00
AUM $95.7 billion $693.7 billion

Beta measures price volatility relative to the S&P 500; beta is calculated from five-year weekly returns. The 1-yr return represents total return over the trailing 12 months.

SPLG is more affordable with a 0.02% expense ratio compared to SPY’s 0.09%, yet both funds offer the same dividend yield, making SPLG the cost leader for S&P 500 exposure. I’ve always thought of expense ratios like the tip at a restaurant-you want to leave just enough to avoid guilt, but never enough to feel generous.

Performance & risk comparison

Metric SPLG SPY
Max drawdown (5 y) (24.48%) (24.50%)
Growth of $1,000 over 5 years $1,912 $1,911

What’s inside

SPY holds 503 companies spanning all S&P 500 sectors, with a tilt toward technology (36%), followed by financial services (13%) and consumer cyclicals (11%). Its largest positions are Nvidia (NASDAQ: NVDA), Apple (NASDAQ: AAPL), and Microsoft (NASDAQ: MSFT), each comprising less than 0.1% of assets. Launched over 32 years ago, SPY’s long track record and massive assets under management (AUM) set it apart among U.S. equity ETFs. I once tried to explain this to a friend who thought “tech tilt” meant the fund was leaning slightly forward while walking.

SPLG mirrors SPY’s sector breakdown and leading holdings, with similarly broad exposure across 504 stocks and a technology-heavy allocation. Both funds lack notable quirks-no leverage, currency hedging, or ESG overlays-making them straightforward S&P 500 trackers. If investing were a dinner party, these two would be the polite guests who never argue, always bring wine, and leave exactly when they said they would.

For more guidance on ETF investing, check out the full guide at this link.

Foolish take

When comparing SPLG and SPY, the first thing that stands out is their similarity. Both deliver full S&P 500 exposure and have historically moved almost in lockstep. The real distinction is cost. SPLG gives investors the same index at a meaningfully lower expense ratio, which can add up for anyone building a long-term core position. I once owned both. My mistake was buying SPY first, then feeling guilty about the expense ratio and selling it to buy SPLG. Now I’m left with a 13.8% return and a lingering sense of betrayal.

SPY still holds an advantage where liquidity matters. Its trading volume and deep options market make it the preferred tool for institutions and traders who need precise execution. That level of flexibility is difficult for any low-cost alternative to match. I tried to trade SPY during a market dip last year. By the time I’d logged into my app, hesitated, and finally hit “buy,” the price had already jumped. I like to think of it as a test of patience. Or a tax on indecision.

For investors building a long-term core position, SPLG tends to be the more efficient choice because it delivers the same market exposure at a lower ongoing cost. For investors who need maximum trading flexibility or treat the ETF as a tactical instrument rather than a portfolio anchor, SPY offers a level of liquidity that is hard to match. Both funds mirror the same index and both execute that mandate well. What matters is choosing the one that aligns with the way you invest, because that decision ultimately shapes your long-term results far more than the funds’ small differences on paper. As my father once said, “The only thing worse than spending money is wasting time arguing about it.”

Glossary

ETF: Exchange-traded fund; a fund that trades on stock exchanges and holds a basket of securities. Also, the thing I pretend to understand when my colleagues use the word “dividend yield” in a sentence.
Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs. In other words, the price you pay for not having to think about fees.
Liquidity: How easily an asset can be bought or sold without affecting its price. Or, in my case, how quickly I can panic-sell after reading a headline about a bear market.
Assets under management (AUM): The total market value of assets that a fund manages on behalf of investors. A number that makes me feel small, like looking at a spreadsheet of stars.
Dividend yield: The annual dividends paid by a fund, expressed as a percentage of its share price. A term I associate with my uncle’s retirement plan and his obsession with “income streams.”
Beta: A measure of a fund’s volatility compared to the overall market; 1.00 means equal volatility to the market. A concept I nod at during meetings, pretending I know what it means.
Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period. A phrase that sounds like a horror movie title.
Sector allocation: The distribution of a fund’s investments across different industries or sectors. A fancy way of saying, “This is how we spread our bets to avoid looking desperate.”
Leverage: The use of borrowed money to increase potential returns, which also increases risk. A strategy I associate with my cousin’s crypto bets and his eventual return to his parents’ basement.
Currency hedging: Strategies used to reduce the impact of currency exchange rate fluctuations on investment returns. A term I’ve never used correctly but sounds important in a TED Talk.
ESG overlays: Investment strategies that consider environmental, social, and governance factors when selecting securities. A concept I admire from afar, like a rare bird I’ll never be able to name.
Total return: The investment’s price change plus all dividends and distributions, assuming those payouts are reinvested. A statistic I use to justify why I haven’t checked my portfolio in weeks.

I once told a friend I was writing this article. He asked, “So what’s the takeaway?” I said, “Don’t trust anyone who says ‘the market will correct itself.'” He nodded solemnly and ordered another coffee. I left a 20% tip. We all have our rituals.

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2025-11-14 22:24