IEF vs SPY
IEF vs SPY
iShares 7-10 Year Treasury Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
SPY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | IEF | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.15% | 0.09% | |
| AUM | $47.3B | $789.1B | |
| Dividend Yield | 3.88% | 1.01% | |
| Holdings | 15 | 505 | |
| YTD Return | -1.36% | +13.10% | |
| 1Y Return | +0.63% | +22.80% | |
| 3Y Return (annualized) | +3.37% | +20.98% | |
| 5Y Return (annualized) | -1.45% | +13.20% | |
| Volatility (annualized) | 6.6% | 15.3% | |
| Max Drawdown | -23.9% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Jul 22, 2002 | Jan 22, 1993 |
IEF vs SPY Performance
iShares 7-10 Year Treasury Bond ETF (IEF) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year IEF returned +0.63% while SPY returned +22.80%. Year to date, IEF is down 1.36% versus a gain of 13.10% for SPY.
Over three years, IEF compounded at +3.37% per year against +20.98% for SPY; over five years the annualized figures are -1.45% and +13.20% respectively. Across the full 24-year window we track, SPY has the edge at +8.83% annualized vs +3.34%. 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 6.6% for IEF. 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 -23.9% for IEF and -56.5% for SPY. 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 -0.11. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
IEF charges 0.15% per year while SPY charges 0.09%. On a $10,000 position that is $15 vs $9 annually, a gap of $6 per year that compounds over a long holding period. On income, IEF currently yields 3.88% against 1.01% for SPY.
Holdings Overlap
IEF and SPY share 0 holdings out of 515 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, IEF or SPY?
IEF has an expense ratio of 0.15% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $6 per year of difference.
Which performed better, IEF or SPY?
Over the past year IEF returned +0.63% vs +22.80% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (24 years), IEF annualized +3.34% vs +8.83% for SPY. Past performance does not guarantee future results.
Which is riskier, IEF or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 6.6% for IEF. Worst drawdown: IEF -23.9% vs SPY -56.5%.
Should I hold both IEF and SPY?
IEF and SPY have a monthly-return correlation of -0.11, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between IEF and SPY?
IEF and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 515 unique securities.
Which pays a higher dividend, IEF or SPY?
IEF yields 3.88% while SPY yields 1.01%, so IEF currently pays the higher dividend yield.
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