IWM vs SPY: Head-to-Head Comparison
IWM vs SPY: iShares Russell 2000 ETF has an expense ratio of 0.19% while SPDR S&P 500 ETF Trust charges 9.45%. IWM holds 1,955 securities vs SPY's 503. 5-year returns: 8.20% vs 15.70%.
Last updated: April 2026
Small vs Large Cap
Quick Verdict
SPY edges out IWM with a stronger Beginner Suitability Score (9 vs 8.5). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | IWM | SPY |
|---|---|---|
| Expense Ratio | 0.19% | 9.45% |
| AUM | $72.0B | $600.0B |
| Dividend Yield | 1.30% | 1.20% |
| Holdings | 1,955 | 503 |
| 1-Year Return | 17.80% | 26.50% |
| 5-Year Return (Ann.) | 8.20% | 15.70% |
| 10-Year Return (Ann.) | 7.80% | 13.20% |
| Beta | 1.22 | 1.00 |
| P/E Ratio | 28.5 | 25.8 |
IWM 5-year annualized return is 8.20% compared to SPY's 15.70%. Over 10 years, IWM returned 7.80% vs SPY's 13.20%.
View data table
| Period | IWM Return | SPY Return |
|---|---|---|
| YTD | 1.50% | 3.10% |
| 1 Year | 17.80% | 26.50% |
| 3 Year | 2.50% | 11.10% |
| 5 Year | 8.20% | 15.70% |
| 10 Year | 7.80% | 13.20% |
Key Differences Between IWM and SPY
IWM (iShares Russell 2000 ETF) is a u.s. small-cap blend fund managed by BlackRock. IWM tracks the Russell 2000 index, which includes 2,000 small-cap U.S. companies. Small-cap stocks are younger, faster-growing companies that have historically delivered higher returns than large-caps over very long time periods, but with significantly more volatility. Beginners should view IWM as a way to add growth potential through smaller companies that could become the large-caps of tomorrow.
SPY (SPDR S&P 500 ETF Trust) is a u.s. large-cap blend fund managed by State Street Global Advisors. SPY was the very first ETF listed in the United States and remains the most heavily traded ETF in the world. Like VOO, it tracks the S&P 500 index, but SPY is especially popular among active traders due to its enormous daily trading volume. Beginners should know that SPY and VOO hold the same stocks, but SPY has a slightly higher expense ratio.
The most notable differences are in fees (0.19% vs 9.45%), number of holdings (1,955 vs 503), and 5-year returns (8.20% vs 15.70%).
IWM vs SPY multi-factor comparison: IWM has a 0.19% expense ratio, 8.20% 5-year return, 1,955 holdings, 1.22 beta, and 1.30% yield. SPY has 9.45% expense ratio, 15.70% 5-year return, 503 holdings, 1.00 beta, and 1.20% yield.
View data table
| Metric | IWM | SPY |
|---|---|---|
| Expense Ratio | 0.19% | 9.45% |
| 5-Year Return | 8.20% | 15.70% |
| Holdings | 1,955 | 503 |
| Beta | 1.22 | 1.00 |
| Dividend Yield | 1.30% | 1.20% |
Want the full framework? This 2-hour ETF course teaches you exactly how to pick, buy, and hold profitable ETFs — from zero to confident investor. Under $15.
Ready to invest? Open an IBKR account in 10 minutes and get free stock. $0 commissions on US ETFs • Fractional shares from $1 • 150+ global markets.
Holdings Overlap Analysis
0%
Holdings Overlap
IWM and SPY share only 0% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.
IWM and SPY share 0% of their top holdings (low overlap). IWM has 1,955 total holdings and SPY has 503.
View data table
| Metric | IWM | SPY |
|---|---|---|
| Overlap | 0% | 0% |
| Unique Holdings | 100% | 100% |
| Total Holdings | 1,955 | 503 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
IWM
Fee cost: $1,613
SPY
Fee cost: $39,143
Over 20 years, the fee difference amounts to $37,530 on a $10,000 investment. IWM saves you more in fees over time.
On a $10,000 investment over 20 years at 8% return, IWM (0.19% fee) grows to $44,997 while SPY (9.45% fee) grows to $7,467. The fee difference costs $37,530.
View data table
| Year | IWM Value | SPY Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,564 | $9,296 |
| 10 | $21,212 | $8,641 |
| 15 | $30,895 | $8,032 |
| 20 | $44,997 | $7,467 |
Which One Should a Beginner Choose?
Choose IWM if: You want investors with a long time horizon who want small-cap growth exposure, those looking to diversify beyond large-cap stocks in their portfolio, investors who believe small-cap stocks are poised for a rebound relative to large-caps. It's managed by BlackRock with an expense ratio of 0.19%.
Choose SPY if: You want active traders who need high liquidity and tight spreads, options traders looking for the deepest options market available, institutional investors executing large block trades. It's managed by State Street Global Advisors with an expense ratio of 9.45%.
Can You Own Both IWM and SPY?
Absolutely! With only 0% overlap, IWM and SPY complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.
Frequently Asked Questions
Should I buy IWM or SPY?▾
SPY edges out IWM with a stronger Beginner Suitability Score (9 vs 8.5). It offers better overall characteristics for new investors. However, both are solid options. IWM is best for investors who want investors with a long time horizon who want small-cap growth exposure, while SPY is better suited for active traders who need high liquidity and tight spreads.
What is the difference between IWM and SPY?▾
IWM (iShares Russell 2000 ETF) tracks u.s. small-cap blend investments with 1,955 holdings and a 0.19% expense ratio. SPY (SPDR S&P 500 ETF Trust) focuses on u.s. large-cap blend with 503 holdings at 9.45%. Their top holdings overlap by 0%.
Can I own both IWM and SPY?▾
Yes! With only 0% holdings overlap, IWM and SPY complement each other well. Owning both gives you broader diversification.