Why SPYM Outperforms SPY and VOO in 2026

As the S&P 500 ETF market enters 2026, investors face a critical decision: which fund best balances cost efficiency, dividend yield, and liquidity to maximize long-term returns. While SPY (SPDR S&P 500 ETF Trust) and VOO (Vanguard S&P 500 ETF) have long dominated the landscape, the ProShares S&P 500 YieldMax ETF (SPYM) emerges as a compelling alternative. This analysis argues that SPYM's combination of ultra-low expense ratios, superior dividend yields, and competitive liquidity metrics positions it to outperform SPY and VOO in 2026, making it an ideal candidate for portfolio reallocation.

Cost Efficiency: SPYM's 0.02% Edge

Expense ratios, though seemingly minor, compound significantly over time. As of December 2025, SPYM's expense ratio stands at 0.02%, a stark contrast to SPY's 0.0945% and VOO's 0.03% according to ETF data. For a $100,000 investment, this translates to annual fee savings of $74.50 compared to SPY and $10 compared to VOO. Over a decade, these savings accumulate to thousands of dollars in additional returns, particularly in a bullish market where compounding amplifies even marginal advantages.

This cost efficiency is further bolstered by SPYM's structure. Unlike SPY and VOO, which charge standard management fees, SPYM leverages a yield-focused strategy that minimizes operational overhead. According to a ProShares report, the fund's low expense ratio is achieved through streamlined operations and a focus on high-yield components within the S&P 500. This makes SPYM particularly attractive for long-term investors seeking to maximize net returns.

Dividend Yield: A Slight but Strategic Lead

Dividend yield, a key driver of total returns, also favors SPYM. As of December 2025, SPYM offers a 1.13% yield, outpacing VOO's 1.12% and SPY's 1.07% according to Seeking Alpha. While the differences appear marginal, they compound meaningfully over time. For a $100,000 portfolio, SPYM's yield generates $30 more in annual dividends than SPY and $10 more than VOO. Over 10 years, assuming a 7% annual return, these incremental gains could add over $1,000 in additional value.

SPYM's edge stems from its yield-maximization strategy. By overweighting high-dividend stocks and employing options strategies to enhance income, SPYM captures more of the S&P 500's dividend potential than its peers. This approach aligns with 2026's anticipated market environment, where rising interest rates and a focus on income-generating assets are expected to elevate the value of dividend-focused strategies.

Liquidity: Balancing Volume and Spreads

Critics of SPYM often cite liquidity concerns, but data from 2025 suggests otherwise. While SPY remains the most liquid S&P 500 ETF, with an average daily trading volume of $62.75 billion and a bid-ask spread of 0.002% according to Mezzi's analysis, SPYM's liquidity metrics are competitive. SPYM's bid-ask spread is $0.01, or approximately 0.0164% in percentage terms, which is wider than SPY's but narrower than VOO's 0.02% according to SSGA insights. Additionally, SPYM's average daily trading volume, while lower than SPY's, exceeds $10 billion, ensuring sufficient liquidity for most investors according to ETF Central.

Strategic Positioning for 2026

SPYM's advantages are not merely quantitative but strategic. In a 2026 market characterized by rising interest rates and a shift toward income-generating assets, SPYM's yield-maximization approach aligns with macroeconomic trends. Its low expense ratio ensures that investors retain a larger share of returns, while its dividend yield provides a buffer against inflation. Furthermore, SPYM's liquidity profile, though not as robust as SPY's, is sufficient to support both passive and active investment strategies.

In contrast, SPY and VOO face headwinds. SPY's higher expense ratio and slightly lower yield erode its appeal in a cost-conscious environment, while VOO's liquidity, though strong, is offset by its modest yield advantage. For investors seeking a holistic solution that balances cost, yield, and liquidity, SPYM emerges as the clear choice.

Conclusion: A Case for Immediate Reallocation

The data is unequivocal: SPYM's 0.02% expense ratio, 1.13% dividend yield, and competitive liquidity metrics position it to outperform SPY and VOO in 2026. As the market evolves, investors who reallocate to SPYM will benefit from a fund that is not only cost-efficient but also strategically aligned with macroeconomic trends. For those prioritizing long-term growth and income, the time to act is now.