SPYM: The Cheapest S&P 500 ETF — But Is Dirt-Cheap Really Worth It Right Now?

What They Got Right

• The fee advantage is real. At 0.02% MER, SPYM is tied for the absolute cheapest S&P 500 ETF available ^[1]. That's 1 basis point (0.01%) cheaper than VOO and IVV ^[10], which adds up to real money over decades. For someone investing $10,000, you save roughly $1/year in fees compared to VOO — tiny in isolation, but part of a winning strategy.
• The 3-year performance speaks for itself. SPYM returned 21.77% annualized over the past 3 years ^[3], and the fund delivered +17.85% in 2025 alone ^[11]. That's inline with what you'd expect from the S&P 500 during a strong bull market dominated by AI and mega-cap tech.
• It's a legitimate S&P 500 index fund. With 504 holdings ^[4] and beta of 1.01 versus the S&P 500 ^[12], SPYM does exactly what it promises — it mirrors the index. There's no hidden strategy or complexity. This simplicity is powerful for beginners.
• The rebranding was cosmetic. When State Street changed the ticker from SPLG to SPYM in October 2025, it was purely a name change ^[5]. No fees went up, no holdings changed, no manager was swapped. Investors who owned SPLG simply woke up owning SPYM with identical economics.

What They Missed

• "Cheapest" doesn't mean "best" — especially right now. Yes, SPYM saves 1 basis point on fees versus VOO, but that $1/year advantage is dwarfed by sector and timing risks. The fund is down ~6% from its January peak ^[7] due to US-Iran tensions and Strait of Hormuz closure ^[13]. In a market correction, saving 1 basis point on fees is like arguing about rounding errors while your portfolio is bleeding 5-10%. The recommendation buried the timing question — is now a good time to be 100% long S&P 500 mega-caps?
• The mega-cap concentration is glossed over. SPYM's top 5 holdings (NVDA, AAPL, MSFT, AMZN, GOOGL) represent 25.65% of the portfolio ^[14], and the top 10 holdings make up roughly 36% of assets ^[13]. Information Technology alone is 32.97% of the fund ^[15]. This isn't diversification — it's a leveraged bet on US large-cap tech. The data acknowledges this but doesn't stress-test what happens if Nvidia or Apple stumbles 20%.
• Canadian investors face a serious tax drag that's barely explained. The fund distributes dividends quarterly ^[16], and Canadians holding SPYM outside an RRSP face 15% US withholding tax on dividends ^[17], reducing yield from 1.16% to ~0.99% after-tax. For a $50,000 investment, that's an extra $85/year in invisible drag. The bottom line mentions this, but it's not prominently flagged as a deal-killer for TFSAs and non-registered accounts.
• The valuation context is missing. SPYM's weighted-average P/E ratio is 20.68 ^[18] — near the top of historical ranges. The fund estimates 13.99% EPS growth over 3–5 years ^[19], which means you're paying a premium for growth that's not guaranteed. No comparison to historical averages or discussion of whether 20.68x earnings is attractive or expensive given the Iran conflict and oil price spikes in March/April 2026.

The Bottom Line

SPYM is a technically excellent product — the cheapest way to own the S&P 500, with transparent fees and solid long-term track record. But the recommendation feels tone-deaf to current market conditions. In early 2026, with geopolitical risk elevated, mega-cap tech showing cracks, and valuations near historical highs, buying the "lowest-cost S&P 500 ETF" is like buying the cheapest flight on an airplane that's currently losing altitude. The recommendation should have acknowledged: Is now the right time to go all-in on US large-caps? Should Canadians wait for an RRSP contribution room, or bite the withholding-tax bullet? Are there better entry points coming? These questions aren't answered.