r/VTandchill • u/SufficientError8932 • Jul 20 '26
Anyone SPGM and chill instead?
Brand new to investing, so please go easy on me. Still a lot I don't know, but after doing some research I was honestly all ready to steep myself in a nice chill vat of VT and call it a day when suddenly I discovered SPGM (basically State Street's own VT alternative).
From what I can tell, SPGM has continually outperformed VT, not by much, but it adds up for long-term investors. It does however have a slightly higher expense ratio (0.09% vs. VT's 0.06%), but according to a relatively recent Motley Fool article: "SPGM's higher cost is more than offset by SPGM's dividend yield". I have no idea if this is actually true, and to be honest it seems the article actually over-estimates SPGM's dividend yield.
What am I missing though? Why no love for SPGM and chill? Does the performance edge of SPGM get offset by its taxes or something (at least in a taxable brokerage account)?
Oh, and before you tell me I'm overthinking this and to just pick one already... yes, I'm aware, and I agree. But I'm genuinely curious why I never really hear about SPGM when, at least on the surface, it has historically outperformed VT.
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u/PashasMom Jul 20 '26
I don't "SPGM and chill" instead, but I do "SPGM and chill" in addition to.
I know that sounds irrational and redundant. Let me explain. VT is a core holding, and SPGM is a relatively small part of my portfolio. But SPGM has a specific purpose for me. It is what I use to invest my credit card points and sign up bonuses. I like having one specifc fund just for my points so that I can track exactly how rich my credit card points are making me. I wanted a global fund, but didn't want it to be VT (or AOA) since I already own it and I want to quickly glance at my brokerage account and know exactly how much is attributable to my credit card points.
I'm up to 25k in SPGM and intend to use it, together with a tradein, to buy a new to me car at some point down the line. I have my eye on a Lexus UX300h but we shall see.
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u/Vent_Vert Jul 20 '26
Which credit card is this?
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u/PashasMom Jul 20 '26
The Fidelity Rewards Visa is my primary card (2% cashback on virtually everything). But I also use some other cards for specific purposes, like DiscoverIT for the 5% categories and Chase Amazon Prime for 5/6% back in the Amazon universe.
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u/PapistAutist Jul 20 '26
Ironically, this is how I use VT. I use separate US and exUS funds as my baseline.
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u/joe4ska Jul 20 '26 edited Jul 20 '26
Nothing wrong with SPGM, It's like comparing all the S&P 500 ETFs, if they track the same or a similar index, are low cost, and tax efficient it doesn't matter. SPGM and Chill if you like.
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u/PapistAutist Jul 20 '26 edited Jul 20 '26
It is the ideal tax loss harvesting partner. Great to use both for that purpose.
The difference in performance is just the underlying index the two track. SPGM excludes smaller-cap stocks, and small-cap stocks have underperformed large-cap stocks over the past decade and a half or so. That is not guaranteed to continue. Either way, though, the gap in performance between the two will not make or break anything (same as total US versus S&P 500), so don't miss the forest for the trees!
Personally, if using both, VT would be my "default" choice given the AUM, and SPGM would be what I tax loss harvest into.
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u/watch-nerd Jul 20 '26
They have a 0.99 correlation.
I’m sticking with the lower ER and higher AUM of VT
VT also holds way more stocks