Why SPY Is 5x More Expensive Than SPYM

[00:00:00]SPY is five times more expensive than SPYM, $903.

[00:00:05]That's the fee difference between two S&P 500 ETFs, SPY and SPYM, over 20 years on a $10,000 investment. We use 10% annual return, the S&P 500 historical average. SPY and SPYM are both ETFs that track the S&P 500, the same index, the same 500 companies, the same weightings. One is just five times more expensive than the other. SPY charges 0.0945% per year. SPYM charges 0.02% per year.

[00:00:34]Over 20 years, SPY costs $1,147 in total fees on that $10,000. SPYM costs $244.

[00:00:43]So, the gap is $903.

[00:00:45]It compounds because the fee applies to your growing balances every single year.

[00:00:50]SPYM is not the only strong alternative.

[00:00:53]IVV and VOO are also S&P 500 ETFs that charge 0.03%, also far cheaper than SPY. The difference between SPYM, IVV, and VOO is small. The difference between any of them and SPY is not. There is one area where SPY earns its premium, trading. It has the deepest option chain of any ETF in the world. For active traders, that liquidity has real value. For a long-term buy and hold investor, you are paying for tools that you'll never use.

[00:01:22]So, for long-term investors, SPYM, IVV, or VOO are the stronger choice. Same index, significantly lower cost. Comment S&P and we will send you the full comparison spreadsheet.