What are ETFs and how do they work?

Exchange-Traded Funds (ETFs) are investment funds that trade on stock exchanges, much like individual stocks. They hold a basket of assets, such as stocks or bonds, allowing investors to buy a diversified portfolio with a single transaction. ETFs are passively managed, often tracking an index. Investors can buy and sell shares throughout the trading day at market-determined prices. This flexibility, combined with transparency in holdings and low fees, makes them popular for long-term investing and diversification.

What is an expense ratio in the context of an ETF?

An expense ratio is the annual fee that all funds and ETFs charge their shareholders, expressed as a percentage of the fund's assets. It covers operating costs, such as administration, management fees, and other expenses. For example, SPY has a 0.09% expense ratio, while SPYX charges 0.20%. A lower expense ratio means fewer costs are deducted from your investment returns over time, making it an essential factor to consider when comparing similar ETFs.

What is a 'large blend' ETF?

A 'large blend' ETF holds stocks from large companies that possess both growth and value characteristics. Growth stocks are those expected to grow at an above-average rate compared to their industry, while value stocks are those that have characteristics that are attractive to investors, such as a low price-to-earnings ratio. Large blend ETFs offer a balanced exposure to the market, mitigating risks associated with concentrating on only growth or value stocks.

How do the expense ratios of SPY and SPYX compare?

SPY has a lower expense ratio of 0.09%, while SPYX charges 0.20%. This means that, theoretically, for every £100 invested, SPY costs 9p annually, while SPYX costs 20p. The 0.11 percentage point difference can compound over time, affecting the net return. Lower fees are generally beneficial, but they must be weighed against the unique features and strategic goals of each fund.

What are the main differences between SPY and SPYX's investment strategies?

SPY aims to track the S&P 500 index, offering broad exposure to the U.S. large-cap market. SPYX, however, follows the S&P 500 Fossil Fuel Reserves Free Index, excluding companies with significant fossil fuel reserves. This exclusion aligns SPYX with environmental, social, and governance (ESG) criteria. While both funds share a similar top holdings structure, SPYX introduces an ethical dimension by focusing on companies without fossil fuel exposure.

Do SPY and SPYX have similar dividend yields?

Both SPY and SPYX offer dividend yields, but they differ slightly. SPY has a dividend yield of 0.98%, while SPYX provides a yield of 0.84%. Although both funds are dividend-paying, these yields are relatively modest compared to some income-focused funds. This difference may influence investors seeking regular income, although the disparity is relatively small and should be viewed in the broader context of total return.

Which fund offers more diversified holdings?

Both SPY and SPYX offer extensive diversification as they are based on large-cap indices. SPY's top holdings include major tech giants, which contribute significantly to its performance. SPYX shares similar top holdings but excludes companies with fossil fuel reserves, which may slightly alter its sector composition. Neither fund provides sector weight data for comparison, so their overall diversification levels should be assessed based on their respective strategies.

How does market liquidity differ between SPY and SPYX?

Market liquidity is crucial for ease of buying and selling ETF shares. SPY, with net assets of $785.0 billion, offers exceptional liquidity due to its massive size and long history. In contrast, SPYX, with net assets of $2.8 billion, is also liquid but less so than SPY. Higher liquidity typically means tighter bid-ask spreads and greater trading volume, reducing costs and improving execution for investors.

What impact does an ETF's inception date have on investors?

An ETF's inception date can provide insights into its track record. SPY, launched in 1993, has over 30 years of data, offering a long history of performance. SPYX, established in November 2015, has a shorter track record of approximately 11 years. Longer track records allow investors to see how an ETF performed under various market conditions, potentially offering more reassurance about its stability.

Can ETFs replace individual stock investments?

ETFs can complement or replace individual stock investments by offering diversified exposure through a single purchase. However, they lack the concentrated growth potential of selecting a few high-performing stocks. Investors who prefer broad market participation or wish to mitigate single-company risk may favour ETFs, while those seeking outsized returns may opt for individual stock picking.

How to evaluate sector concentration in SPY and SPYX?

Sector concentration is evaluated by assessing the weight of holdings within specific sectors. While SPY and SPYX have similar top holdings like NVDA, AAPL, and MSFT, sector weight data is not available. Therefore, sector concentration must be inferred from their top holdings, which indicate a significant tech weighting for both funds. This suggests that both ETFs might be susceptible to tech-driven market movements.

What does an ETF's 'net assets' tell us?

An ETF's 'net assets' reflects the total market value of the fund's holdings, minus its liabilities. It indicates the fund's size and overall popularity among investors. SPY has net assets of $785.0 billion, suggesting high investor confidence and liquidity. SPYX, with $2.8 billion, is smaller but still substantial. Larger funds like SPY typically benefit from economies of scale, which can lead to lower transaction costs.

SPY vs SPYX

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare SPY and SPYX, examining fees, holdings, dividends, and how each fund tracks its market. SPY has a 0.09% expense ratio, while SPYX has 0.20%. Review the details to understand the differences between these large blend ETFs. Educational content, not financial advice.

Compare SPY and SPYX, examining fees, holdings, dividends, and how each fund tracks its market. SPY has a 0.09% expense ratio, while SPYX has 0.20%. Review the details to understand the differences be...

Fund Snapshot

Key Fund Metrics

SPY

Metric

SPYX

0.09%

Expense Ratio

0.20%

0.98%

Dividend Yield

0.84%

$785.05B

Net Assets

$2.84B

505

Holdings

491

Jan 22, 1993

Inception Date

Nov 30, 2015

–

Index Tracked

–

Large Blend

Fund Category

Large Blend

SPY costs about $11.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	SPY	SPYX
NVDANVIDIA Corporation	8.16%	8.42%
AAPLApple Inc.	7.44%	7.68%
MSFTMicrosoft Corporation	5.56%	5.74%
AMZNAmazon.com, Inc.	3.78%	3.90%
GOOGLAlphabet Inc.	3.11%	3.21%
AVGOBroadcom Inc.	2.58%	2.66%
GOOGAlphabet Inc.	2.48%	2.56%
METAMeta Platforms, Inc.	2.23%	2.30%
MUMicron Technology, Inc.	1.74%	1.79%
TSLATesla, Inc.	1.56%	1.61%

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Compare SPY vs VOO, two S&P 500 ETFs with identical top holdings. SPY charges 0.09% a year while VOO charges 0.03%, a $6 gap per $10,000 invested.

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Investment Analysis

SPY

Pros

The fund boasts an extremely low expense ratio of 0.09%.
It holds massive net assets of $785.0 billion, ensuring high liquidity.
It has a long track record since its inception date of January 1993.

Considerations

Its top ten holdings create a significant concentration in the technology sector.
The relatively modest dividend yield of 0.98% may not suit income investors.
Specific sector weights are not available for this fund in the provided data.

SPYX

Pros

It excludes companies with fossil fuel reserves, aligning with specific ethical criteria.
The fund maintains a substantial net asset base of $2.8 billion.
It offers exposure to major tech giants like NVDA and AAPL.

Considerations

Its expense ratio of 0.20% is notably higher than that of standard index ETFs.
The dividend yield of 0.84% is slightly lower than the benchmark comparison.
Established in November 2015, it has a much shorter track record than Fund A.

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About SPY and SPYX

SPY (SPY)

SPDR S&P 500 ETF Trust (SPY) is an exchange‑traded fund designed to track the S&P 500 index, offering investors broad exposure to large‑capitalisation US equities. It is widely used by retail and institutional investors for core portfolio allocation, tactical trading and hedging because of its deep liquidity and transparent holdings. SPY distributes dividends (typically quarterly) and reflects the performance of the underlying index, so returns move with the US large‑cap market. As with any equity product, value can fall as well as rise and past performance is not a guide to the future. Costs, tax considerations and suitability will depend on an individual’s circumstances; consult official documents and consider seeking independent advice where appropriate. This summary is general educational information and not personalised investment advice.

SPYX (SPYX)

The SPDR S&P 500 Fossil Fuel Reserves Free ETF (SPYX) offers investors exposure to a subset of the S&P 500 index, specifically excluding companies with fossil fuel reserves. This approach allows those interested in sustainable investing to maintain a portfolio largely aligned with major US large-cap stocks while steering clear of traditional energy producers. With 491 holdings, the fund focuses on large blend companies that meet its exclusion criteria. The ETF is managed by State Street Global Advisors and has an expense ratio of 0.20%, which is competitive for its strategy. As of recent data, it holds approximately USD 2.84 billion in net assets. Investors should note that while it excludes fossil fuel reserve owners, it may still include companies that use fossil fuels or have other environmental impacts. Performance and dividend yield, currently at 0.84%, can fluctuate with market conditions.

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SPY vs SPYX

Fund Snapshot