The SPDR S&P 500 ETF Trust (SPY) outperforms the iShares Russell 2000 ETF (IWM) with higher returns, lower volatility, and lower expense ratio. SPY focuses on large-cap U.S. stocks, while IWM tracks small-cap domestic stocks, offering distinct investment opportunities. SPY also has higher assets under management and a longer operational history.

SPY has a lower expense ratio, higher dividend yield, and superior performance compared to IWM over the past five years. It holds large-cap U.S. stocks with a sector tilt toward technology, financial services, and communication services. In contrast, IWM offers diversified access to small-cap stocks across various sectors without a dominant holding.

Over the last five years, SPY has shown stronger growth and lower drawdowns than IWM due to its exposure to large-cap stocks. Large-caps like Nvidia, Apple, and Microsoft form the top holdings of SPY, contributing to its performance. While IWM offers potential for explosive growth, it is more volatile and susceptible to price fluctuations.

Investors seeking stability amid market volatility may prefer large-cap stocks through an S&P 500 ETF like SPY. However, small-cap stocks, as represented by IWM, can offer lucrative opportunities for those willing to ride out short-term price fluctuations. Diversifying across both large and small-caps can help capitalize on future market winners.

Read more at Yahoo Finance: Is Large-Cap Stability or Small-Cap Growth the Better Choice for Investors Right Now?