MBB vs SPY
MBB vs SPY
iShares MBS ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
MBB has a lower expense ratio. SPY delivered stronger 1-year returns. MBB offers more diversification with 2339 holdings.
Side-by-Side Comparison
| Metric | MBB | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.09% | |
| AUM | $39.1B | $789.1B | |
| Dividend Yield | 4.26% | 1.01% | |
| Holdings | 11,178 | 505 | |
| YTD Return | -0.26% | +9.93% | |
| 1Y Return | +4.17% | +19.50% | |
| 3Y Return (annualized) | +4.35% | +19.33% | |
| 5Y Return (annualized) | +0.06% | +12.82% | |
| Volatility (annualized) | 4.3% | 15.3% | |
| Max Drawdown | -18.4% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Mar 13, 2007 | Jan 22, 1993 |
MBB vs SPY Performance
iShares MBS ETF (MBB) 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 MBB returned +4.17% while SPY returned +19.50%. Year to date, MBB is down 0.26% versus a gain of 9.93% for SPY.
Over three years, MBB compounded at +4.35% per year against +19.33% for SPY; over five years the annualized figures are +0.06% and +12.82% respectively. Across the full 19-year window we track, SPY has the edge at +8.74% annualized vs +0.45%. 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 4.3% for MBB. 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 -18.4% for MBB 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 0.21. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MBB charges 0.04% per year while SPY charges 0.09%. On a $10,000 position that is $4 vs $9 annually, a gap of $5 per year that compounds over a long holding period. On income, MBB currently yields 4.26% against 1.01% for SPY.
Holdings Overlap
MBB and SPY share 0 holdings out of 2842 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, MBB or SPY?
MBB has an expense ratio of 0.04% while SPY charges 0.09%. MBB is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, MBB or SPY?
Over the past year MBB returned +4.17% vs +19.50% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (19 years), MBB annualized +0.45% vs +8.74% for SPY. Past performance does not guarantee future results.
Which is riskier, MBB or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 4.3% for MBB. Worst drawdown: MBB -18.4% vs SPY -56.5%.
Should I hold both MBB and SPY?
MBB and SPY have a monthly-return correlation of 0.21, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MBB and SPY?
MBB and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 2842 unique securities.
Which pays a higher dividend, MBB or SPY?
MBB yields 4.26% while SPY yields 1.01%, so MBB currently pays the higher dividend yield.
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