MHF vs SPY
MHF vs SPY
Western Asset Municipal High Income Fund Inc. 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 | MHF | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.71% | 0.09% | |
| AUM | $153M | $789.1B | |
| Dividend Yield | 5.89% | 1.01% | |
| Holdings | 248 | 505 | |
| YTD Return | +3.37% | +13.50% | |
| 1Y Return | +6.85% | +23.56% | |
| 3Y Return (annualized) | +8.77% | +21.17% | |
| 5Y Return (annualized) | +1.30% | +13.46% | |
| Volatility (annualized) | 10.3% | 15.3% | |
| Max Drawdown | -44.6% | -56.5% | |
| Fund Family | Franklin Templeton Investments (US) | State Street Investment Management | |
| Category | Tax Preferred | Equity | |
| Inception | Nov 28, 1988 | Jan 22, 1993 |
MHF vs SPY Performance
Western Asset Municipal High Income Fund Inc. (MHF) is a ETF from Franklin Templeton Investments (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year MHF returned +6.85% while SPY returned +23.56%. Year to date, MHF is up 3.37% versus a gain of 13.50% for SPY.
Over three years, MHF compounded at +8.77% per year against +21.17% for SPY; over five years the annualized figures are +1.30% and +13.46% respectively. Across the full 31-year window we track, SPY has the edge at +8.85% annualized vs +0.11%. 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 10.3% for MHF. 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 -44.6% for MHF 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 0.22. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
MHF charges 0.71% per year while SPY charges 0.09%. On a $10,000 position that is $71 vs $9 annually, a gap of $62 per year that compounds over a long holding period. On income, MHF currently yields 5.89% against 1.01% for SPY.
Holdings Overlap
MHF and SPY share 0 holdings out of 629 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, MHF or SPY?
MHF has an expense ratio of 0.71% while SPY charges 0.09%. SPY is the cheaper option. On a $10,000 investment, that is $62 per year of difference.
Which performed better, MHF or SPY?
Over the past year MHF returned +6.85% vs +23.56% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (31 years), MHF annualized +0.11% vs +8.85% for SPY. Past performance does not guarantee future results.
Which is riskier, MHF or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 10.3% for MHF. Worst drawdown: MHF -44.6% vs SPY -56.5%.
Should I hold both MHF and SPY?
MHF and SPY have a monthly-return correlation of 0.22, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between MHF and SPY?
MHF and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 629 unique securities.
Which pays a higher dividend, MHF or SPY?
MHF yields 5.89% while SPY yields 1.01%, so MHF currently pays the higher dividend yield.
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