SPY vs. SPYG - Which is Better For You?
As a trader or an investor, selecting the right ETFs can often become a baffling task, especially when we dive deep into the pool with so many options.
SPY and SPYG are two such ETFs managed by State Street Global Advisors that often confront investors with a paradox of choice.
SPY vs. SPYG: Key Characteristics
SPYG invests in the S&P growth index
SPY has a higher expense ratio
SPY pays a higher dividend
SPY is more diversified
Both SPY and SPYG bear similarities in that they aim to match the performance of the S&P indices.
However, SPY tracks the S&P 500 Index, providing broad exposure to U.S. large-cap stocks, while SPYG targets the S&P 500 Growth Index, focusing on growth companies among large-cap stocks.
SPY vs. SPYG: Holdings
Since SPYG focuses on the growth subset of the S&P 500, it is less diversified but shows a strong correlation with SPY.
SPYG holds around 250 companies, while SPY holds 500.
The performances of both tend to move in a similar direction, but SPYG may experience more volatility along the way.
SPY vs. SPYG: Performance
In periods of economic expansion and optimism, growth stocks often outperform the market, providing SPYG an edge over SPY.
Conversely, in downturns or periods of economic uncertainty, SPY’s broad diversification can offer more stability.
SPY is likely the better and more reliable long-term option, while SPYG is good for those looking to take more risks.
SPY vs. SPYG: Dividend Comparison
SPY - 1.41%
SPYG - 1.10%
SPY has generally shown a somewhat higher dividend yield than SPYG since it includes more than just growth-focused companies.
Therefore, for investors seeking higher income, SPY is likely the better option.
SPY vs. SPYG: Expense Ratio Comparison
SPY - 0.09%
SPYG - 0.04%
Expense ratios and fees that ETFs charge their investors are critical factors influencing net returns.
As per the data last updated, SPY revealed a slightly higher expense ratio than SPYG, signaling SPYG to be a more cost-effective option.
SPY vs. SPYG: Volatility Comparison
While SPYG focuses exclusively on growth companies, it’s typically more volatile than SPY. SPY, with its diversified exposure to the S&P 500 companies, tends to offer a more stable performance.
The choice between SPY and SPYG should be guided by individual investor preference, their tolerance of risk, investment period, and expectations of return, apart from the market conditions.
While diversification and stability might favor SPY, SPYG might be the go-to choice for those looking at higher returns amid greater risk-journey. As always, it’s crucial for every investor to understand the kind of resources they are staking their faith and fortune in.
If you want to learn more about investing in the stock market, you can join the HaiKhuu Trading Community.
HaiKhuu offers live trading calls, daily morning reports, and an awesome community of like-minded traders to learn from.
FAQ
Is SPYG a good long-term investment?
In the context of long-term investments, SPYG, the SPDR Portfolio S&P 500 Growth ETF, is generally considered a viable option. It aims at providing investment results that correspond to the S&P 500 Growth Index’s performance.
Is SPY the largest ETF?
Yes, the SPDR S&P 500 ETF (SPY) is indeed the largest ETF. It’s known for its vast asset base and liquidity.
