SPY vs TRHRX Fund Comparison

A comparison between SPY and TRHRX based on their expense ratio, growth, holdings and how well they match their benchmark performance.

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Minafi's Take on SPY vs TRHRX

Here's an in depth look at the differences between SPDR S&P 500 ETF Trust ($SPY) and T. Rowe Price Target 2040 Fund ($TRHRX).

To start off, here's a look at the basics of each fund. Keep an eye on the FI Score. That's a custom score from 0 to 100 that we generate based on how good this fund is for the casual investor. Most investors only need a handful of total funds in their portfolio. The higher the score, the more likely this is one of those few. Score alone isn't enough! Keep reading on to see how different (or perhaps similar) these two funds are.

93% FI Score
  • spy
  • ETF
  • US Stocks
  • Large Blend

SPDR S&P 500 ETF Trust

Expenses: 0.10% (Better than 1% of similar funds)

This is a great choice for a Large Blend US Stocks fund. See why »

63% FI Score
  • trhrx
  • Mutual Fund
  • Allocation
  • Target-Date

T. Rowe Price Target 2040 Fund

Expenses: 0.17% (Better than 1% of similar funds)

This is an OK choice for a Target-Date Allocation fund. See why »

$SPY is classified as an ETF while $TRHRX is classified as a Mutual Fund. Even though one of these is a mutual fund and the other is an ETF, that doesn't matter too much for their holdings. Both ETFs and mutual funds are just containers to hold lots of investments inside of them.

The biggest differences between these two is where they may be offered. ETFs are more widely availble from a larger number of investment apps and websites. Mutual funds, on the other hand, are generally offered by the platform they're issued by (Fidelity funds on Fidelity, Vanguard funds on Vanguard). Usually 401(k)'s will offer both ETFs and Mutual Funds. If you're investing outside of a 401(k), I'd recommend you verify the fees associated with ETF and mutual fund transactions. Some platforms charge an additional fee to purchase a mutual fund.

To learn more about the difference between these two, you can read about the difference between ETFs and Mutual Funds.

When evaluating a fund, the first things I look at are:

  • What it invests in
  • How much it charges in fees
  • How large the fund is

Let's look into these criteria one by one and see if either of these funds stands out.

Fund Holdings Comparison

Minafi's FI Score algorithm takes into account the category and market. The more niche a fund is, the lower the score. This doesn't mean it's a worse fund, but it does mean you should stop and make sure this a fund you need to diversify your portfolio.

SPY TRHRX
Market Score 9.9 /10 4.1 /10
Category Score 10.0 /10 5.0 /10
Total 19.9 9.1

A score of 10 means this is a solid market and category that almost every investor will want to have investments in. The lower the score, the more specific the investment. These scores are based on when most investors would add these funds to their portfolio. A score of 10 means that this fund (or one like it) belongs in a three-fund portfolio. The lower the score, the farther down in your portfolio a fund would go.

Winner: $SPY

Fee Comparison

Fees are one of the biggest killers of portfolio growth. The difference between a 2% fee and a 0.04% fee over 30 years can result in your portfolio having half the total value!

If you're just getting started investing and learning how fees impact your portfolio, I'd encourage you to read through my free investment course (specifically '2.2 - All About Fees') where I go over all the different types of fees you can be charged and how to lower them.

For these two funds, SPY has an expense ratio of 0.10% while TRHRX has an expense ratio of 0.17%. In this case, both of these funds have a similar fee.

Winner: $SPY (barely)

Fund Size Comparison

One place these two funds differ is in their total assets under management. This is a good indication of how many other investors trust this fund. A large fund by itself doesn't mean it's a good fund, but it is one thing to consider when figuring out how to choose the right fund.

In the case of these two funds, SPY is a large fund with 271 Billion in assets under management. TRHRX, on the other hand, is a small fund with 224 Million in assets under management.

Winner: $SPY, SPDR S&P 500 ETF Trust

Which Should You Choose? SPY or TRHRX?

Comparing these two funds isn't an apples to apples comparison. SPY is a US Stocks Large Blend fund, while TRHRX is a Allocation Target-Date fund.

If you're aiming to build a diversified, low-fee, tax-optimized portfolio you likely won't be choosing between these two funds since they're different enough.

Running both of these funds through Minafi's FI Score algorithm, gives SPY a score of 93 and TRHRX a score of 63.

Winner: $SPY, SPDR S&P 500 ETF Trust

$SPY

SPDR S&P 500 ETF Trust

93

Read More
Ratings
Rating Type Rating
Diversification Score 8 /10
Expense Ratio Score 9 /10
Expense Rating 9 /10
Market Score 10 /10
Category Score 10 /10
Overview
Overview Details
Fund Type ETF
Inception Date Jan-22-1993
Exchange NYSE ARCA
Expense Ratio 0.095%
Net Assets 271 Billion
Yield 1.90%
Holdings
Description Info
Market US Stocks
Category Large Blend
Sectors
  • Basic Materials 2.19%
  • Communication Services 10.92%
  • Consumer Cyclicals 10.45%
  • Consumer Defensive 7.38%
  • Energy 3.00%
  • Financial Services 13.75%
  • Healthcare 14.56%
  • Industrials 8.56%
  • Real Estate 2.91%
  • Technology 23.10%
  • Utilities 3.18%
Regions
  • Asia Developed 0.05%
  • Europe Developed 0.28%
  • Europe Emerging 0.01%
  • North America 99.04%
  • United Kingdom 0.62%

$TRHRX

T. Rowe Price Target 2040 Fund

63

Read More
Ratings
Rating Type Rating
Expense Ratio Score 8 /10
Expense Rating 8 /10
Market Score 4 /10
Category Score 5 /10
Overview
Overview Details
Fund Type Mutual Fund
Inception Date Aug-20-2013
Exchange NMFQS
Expense Ratio 0.170%
Net Assets 224 Million
Yield 1.75%
Holdings
Description Info
Market Allocation
Category Target-Date
Sectors
  • Basic Materials 4.03%
  • Communication Services 9.14%
  • Consumer Cyclical 9.76%
  • Consumer Defensive 6.46%
  • Energy 3.13%
  • Financial Services 15.21%
  • Healthcare 15.34%
  • Industrials 9.88%
  • Real Estate 3.33%
  • Technology 19.29%
  • Utilities 4.43%
Regions
  • Africa/Middle East 0.70%
  • Asia Developed 3.33%
  • Asia Emerging 5.52%
  • Australasia 0.66%
  • Europe Developed 11.43%
  • Europe Emerging 0.46%
  • Japan 5.14%
  • Latin America 1.06%
  • North America 67.24%
  • United Kingdom 4.45%

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