Comparing SPY and SPYM: Two State Street SPDR ETFs for S&P 500® exposure
Investors seeking to diversify portfolios and capture market returns often begin with the S&P 500® Index—a well-known index that offers access to 500 of the largest publicly traded US companies.1
For more than 30 years, investors have relied on the first US-listed ETF, the State Street® SPDR® S&P 500® ETF (SPY), for efficient and highly liquid access to the total return of the S&P 500 Index. And for good reason. SPY’s performance mirrors the trajectory of the US equity market.
As investors navigate economic shifts, rate cycles, and innovation-driven growth, SPY continues to be the trusted tool for accessing broad-market performance with efficiency and scale (Figure 1).
State Street Investment Management offers another proxy to the S&P 500 Index. Rebranded in 2025, the State Street® SPDR® Portfolio S&P 500® ETF (SPYM) also tracks the well-respected index, but for just 2 basis points (bps).
That means investors seeking exposure to the S&P 500 Index can choose between two State Street SPDR ETFs based on their specific investment style and priorities.
Figure 2: Two State Street SPDR ETFs offer S&P 500® exposure
| Ticker | Name | Expense ratio (%) | Regulatory structure | AUM ($B) | Share price ($) | 30-day average spread ($) | 30-day average spread (%) |
|---|---|---|---|---|---|---|---|
| SPY | State Street® SPDR S&P 500 ETF | 0.0945 | Unit Investment Trust (UIT) | 648.53 | 650.34 | 0.01 | 0.0021 |
| SPYM | State Street® SPDR® Portfolio S&P 500® ETF | 0.02 | Open End Fund | 119.09 | 76.54 | 0.01 | 0.0127 |
Source: State Street Investment Management and Bloomberg Finance, L.P., as of March 31, 2026. Share price is based off market closing price for fund shares for the as of date.
SPY:The original S&P 500 ETF and world’s most traded ETF2
SPY, the State Street® SPDR® S&P 500® ETF Trust, democratized investing and set the ETF market in motion. Since its launch more than 30 years ago, it has been a key player in the ETF industry, offering investors:
- Record liquidity: SPY is the world’s most traded ETF—trading $63 billion a day, on average—giving investors the ability to tap unmatched liquidity and portfolio flexibility to implement sophisticated trading strategies.3
- An established track record: SPY has closely tracked the performance of the S&P 500® Index for 30-plus years. Investors value this consistency, especially when aiming to capture broad market movements.
- Lower trading costs: While SPY has a slightly higher expense ratio than other S&P 500® ETFs, its liquidity and tight bid-ask spreads often result in lower overall trading costs, especially for frequent traders.4
What can you do with SPY?
The possibilities are nearly endless when you invest in the world’s most traded ETF.5
SPYM: The lowest cost S&P 500 ETF
SPYM, the State Street® SPDR® Portfolio S&P 500® ETF, offers investors a cost-effective solution for seeking exposure to the S&P 500 Index. With the recent focus on low-cost ETFs, SPYM has gained traction among investors looking to reduce their investment expenses due to its:
- Low 2 bps expense ratio: Compared to other S&P 500® ETFs, SPYM boasts a significantly lower 2 bps expense ratio—which may translate to substantial savings over the long-term for cost-conscious investors.6
- Reliable, broad market exposure: Like SPY, SPYM provides exposure to the entire S&P 500® Index, allowing investors to capture the performance of the largest US companies across various sectors.
- Part of a $200B+ product suite: SPYM is just one of the funds within our suite of low-cost State Street SPDR® Portfolio ETFsTM, which collectively surpassed $340B in AUM in 2025.7
Two State Street S&P 500 ETFs strategies to help you reach your goals
You have the choice and power to invest your way with SPY and SPYM.
How do you choose between SPY and SPYM?
Big picture, SPY delivers the liquidity that supports trading efficiencies and optionality. And SPYM’s lower expense ratio may make it more attractive for longer-term allocations and smaller-sized accounts.
To determine which fund is better suited for your objectives, ask yourself:
Evaluate your trading frequency
The costs of owning an ETF extend beyond just the expense ratio. Two primary components make up the total cost of ownership (TCO) of an ETF: trading costs and holding costs.
The more you trade, the greater emphasis you should place on the trading cost component of an ETF’s TCO. If you trade frequently, an ETF’s bid-ask spread can influence the TCO more than the expense ratio. So, do you rebalance monthly? Quarterly? Annually?
Figure 3: Two key components of an ETF’s TCO
Both SPY and SPYM trade, on average, with a $0.01 wide bid-ask spread. However, SPY’s higher share price means its spread is narrower in percentage terms versus SPYM, making trading more cost efficient in terms of basis points (0.002% for SPY and 0.0164% for SPYM).
Just as important for frequent traders: as the industry’s liquidity leader, SPY’s spread remains consistent—even when volatility strikes.
On April 2, 2025, for example, the Trump Administration announced broad-based tariffs on all US trading partners, marking the highest rates in nearly a century. The market experience steep declines—its worst sell-off since 2020, with the S&P 500 falling more than 9% over the next two days.8 Even so, SPY maintained a bid-ask spread below 1 bps.9
On top of this, SPY became the first ETF to trade $127 billion in a single day on April 7, 2025,10 showing that investors gravitate to its deep pool of liquidity—particularly when liquidity is needed most.
Figure 4: SPY has helped investors navigate volatile periods
SPY assets since 1993
Analyze your holding period
Time should also play a role in your product selection. In other words, ask yourself if your S&P 500® allocation is a short-term tactical or buy-and-hold position.
Shorter time horizon? Choose SPY’s lower transaction costs
Let’s say you are a tactical investor who trades 50% of your position periodically over the course of a year. Although two hypothetical ETFs may have the same $0.01 bid-ask spread, the TCO can still differ. Consider an ETF priced at $500/share with an expense ratio of 0.0945% and an ETF at $60/share with an expense ratio of 0.02%.
Assuming market prices remain unchanged and both funds track the index similarly, the ETF with the higher expense ratio could still result in lower total costs—driven by the ETF’s more cost-efficient secondary market (Figure 5).
Figure 5: When to prioritize lower transaction costs
Longer time horizon? Choose SPYM’s lower expense ratio
Now consider a longer investment horizon—say 10 years—where you rebalance 10% of your position each quarter. Using the same ETFs ($500/share with a 0.0945% expense ratio versus $60/share with a 0.02% expense ratio), and assuming both trade with a $0.01 bid-ask spread, the results change.
If market prices remain unchanged and tracking differences are minimal, the ETF with the lower expense ratio results in a lower total cost of ownership. Over longer holding periods, the ongoing expense ratio tends to outweight the impact of transaction costs.
Figure 6: When to prioritize a lower expense ratio
The final verdict: It depends on your needs
Which fund nets out as the clear winner? It’s not clear cut. Your unique investment goals, needs, and objectives determine the winner.
Of course, it doesn’t have to be either/or with SPY and SPYM.
Depending on your priorities and investment style, a combination of these funds may help you reach your goals even more efficiently. Factors that may make a combination of these two ETFs suitable include your tax situations, fee budgets, tactical strategies, and more.
