PREF vs SPY
Principal Spectrum Preferred Securities Active ETF vs State Street SPDR S&P 500 ETF Trust
Which is better, PREF or SPY?
Preferred Stock against Large Cap Blend.
SPY has a lower expense ratio. SPY led over 1Y, 3Y, 5Y and the full window.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | PREF | SPY |
|---|---|---|
| Expense Ratio | 0.55% | 0.09%Best |
| AUM | $1.9B | $823.2B |
| Dividend Yield | 5.48% | 0.99% |
| Holdings | 338 | 1,515 |
| YTD Return | -0.31% | +13.53%Best |
| 1Y Return | +1.38% | +17.47%Best |
| 3Y Return (annualized) | +8.67% | +22.36%Best |
| 5Y Return (annualized) | +2.33% | +13.21%Best |
| Volatility (annualized) | 7.8%Best | 15.9% |
| Max Drawdown | -23.3%Best | -34.1% |
| $10,000 over 5 years | $11,221 | $18,596Best |
| Fund Family | Principal Funds | State Street Investment Management |
| Category | Allocation/Balanced | Equity |
| Style | Preferred Stock | Large Cap Blend |
| Inception | Jul 10, 2017 | Jan 22, 1993 |
Not shown on this pair: Top 10 Weight.
Volatility and max drawdown are measured over the window both funds cover: Jul 11, 2017 to Oct 14, 2026 (9.3 years).
PREF vs SPY growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 9.3 years both funds cover.
PREF vs SPY Performance
Principal Spectrum Preferred Securities Active ETF (PREF) is an ETF from Principal Funds and State Street SPDR S&P 500 ETF Trust (SPY) is an ETF from State Street Investment Management. Over the past year PREF returned +1.38% while SPY returned +17.47%. Year to date, PREF is down 0.31% versus a gain of 13.53% for SPY.
Over three years, PREF compounded at +8.67% per year against +22.36% for SPY; over five years the annualized figures are +2.33% and +13.21% respectively. Across the full 9-year window we track, SPY has the edge at +14.24% annualized vs +1.83%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.9% compared with 7.8% for PREF. 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 -23.3% for PREF and -34.1% for SPY. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.73. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
PREF charges 0.55% per year while SPY charges 0.09%. On a $10,000 position that is $55 vs $9 annually, a gap of $46 per year that compounds over a long holding period. On income, PREF currently yields 5.48% against 0.99% for SPY.
Holdings Overlap
We hold position weights for 1 holding in PREF and 504 in SPY, totalling 10.1% and 99.8% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
0 positions in common, counted across the 1 positions we hold weights for in PREF and 504 in SPY, against full books of 338 and 1,515.
You are not choosing between two funds in isolation.
Whichever of PREF and SPY you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, PREF or SPY?
PREF has an expense ratio of 0.55% while SPY charges 0.09%. SPY is the cheaper option, by $46 a year on a $10,000 investment.
Which performed better, PREF or SPY?
Over the past year PREF returned +1.38% vs +17.47% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (9 years), PREF annualized +1.83% vs +14.24% for SPY. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, PREF or SPY?
SPY has been the more volatile fund at 15.9% annualized versus 7.8% for PREF. Worst drawdown: PREF -23.3% vs SPY -34.1%.
Should I hold both PREF and SPY?
PREF and SPY have a monthly-return correlation of 0.73, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, PREF or SPY?
PREF yields 5.48% while SPY yields 0.99%, so PREF currently pays the higher dividend yield.
Is SPY better than PREF?
SPY has a lower expense ratio. SPY led over 1Y, 3Y, 5Y and the full window. Which one suits a particular account depends on what it is for. This is information, not a recommendation.