Many of the companies in the S&P 500 stock index are on Wall Street.

The top ETFs tracking the S&P 500

If you are looking to invest in the US market, then the S&P 500 index may be an option for your investment. This index, managed by S&P Global, is one of the most popular and widely followed indices worldwide. It tracks the performance of the 500 largest US companies and covers around the 80% of available market capitalisation.

ETFs tracking the S&P 500 are the basis of many portfolios. They give you the opportunity to invest in the 500 largest US companies through a single investment product. But with so many options to choose from, how do you know which ETF fits your investment strategy best? Here we highlight the five most popular* ETFs that replicate S&P 500 and provide you with some information on what you might want to look at before investing.

Name ISIN Type
Vanguard S&P 500 UCITS ETF USD1 IE00B3XXRP09 Distributing
iShares Core S&P 500 UCITS ETF USD Acc2 IE00B5BMR087 Accumulating
Lyxor S&P 500 UCITS ETF - D-EUR3 LU0496786574 Distributing
Invesco S&P 500 Equal Weight UCITS ETF Acc4 IE00BNGJJT35 Accumulating
iShares S&P 500 Inf Tech Sector ETF USD Acc5 IE00B3WJKG14 Accumulating

*Most popular:

1By fund size in EUR

2By fund size in EUR

3By 1-year fund return as of 31.10.23

4Cheapest ETFs tracking this index

5Only ETF that tracks the S&P 500 Capped 35/20 Information Technology index

What are the top S&P 500 ETFs?

On our platform, we offer a wide range of S&P 500 ETFs. Some of these ETFs are also included in our Core Selection, meaning that the commission fees are on the house*.

*Commission fees remain on the house for all ETFs in our Core Selection, you only pay a €1 handling fee per transaction. The ETF Core Selection is subject to change and falls under a Fair Use Policy. Currency, external product and spread costs may apply. If conditions under the Fair Use Policy are not met, an additional €2 commission fee will apply. Please consult the list before you invest.

Vanguard S&P 500 | Vanguard S&P 500 UCITS ETF USD | VUSA | IE00B3XXRP09

This ETF is included in our ETF Core Selection. Vanguard charges a 0.07% TER (Total Expense Ratio) on the product. The dividends are paid quarterly, so this is a distributing ETF. The fund employs a passive management investment approach, meaning that Vanguard owns all the stocks, making this a physical ETF. This ETF tracks the performance of the S&P 500 by investing in all its constituent securities in the same proportion as the Index.

Check the KID to find more information.

iShares S&P 500 | iShares Core S&P 500 UCITS ETF USD (Acc) | SXR8 | IE00B5BMR087

This iShares ETF is the largest ETF that tracks the S&P 500 (at the time of writing), and it’s also included in our ETF Core Selection. It also has an annual TER of 0.07% and provides physical exposure. No dividend is paid on this ETF, meaning all profits are reinvested in the ETF. This means that this an accumulating ETF.

Check the KID to find more information.

Lyxor S&P 500 | Lyxor S&P 500 UCITS ETF - D-EUR | LU0496786574

This is a very large ETF with €2,382 million assets under management as of November 2023. It’s a distributing ETF, and the dividends are paid to the investors annually. Lyxor’s TER amounts to 0.09% p.a..This fund uses synthetic replication to track the performance of the index.

Check the KID to find more information.

Invesco S&P 500 Equal Weight | Invesco S&P 500 Equal Weight UCITS ETF Acc | IE00BNGJJT35

This is a smaller ETF with €71 million assets under management as of November 2023. Invesco is taking a different approach with this ETF, following the S&P 500 Equal Weight Index, which tracks the large cap US stocks equally weighted with a fixed weight of 0.20%. Among all the ETFs that track this index, the Invesco S&P 500 Equal Weight UCITS ETF Acc is the cheapest.

This is a physical and accumulating ETF. Share positions are actively brought back into proportion every quarter, and this is reflected in the TER, which is fixed at 0.20%.

Check the KID to find more information.

iShares S&P 500 Inf Tech Sector | iShares S&P 500 Inf Tech Sector ETF USD Acc | IE00B3WJKG14

This ETF is focused on the tech companies within the S&P 500, and it tracks the S&P 500 Capped 35/20 Information Technology Index. The weight of the largest company in the index is capped to 35%, the other companies have a weight of 20% instead. By buying it, you are investing in a specific market segment within the S&P 500 index. The TER (total expense ratio) investors have to pay is 0.15% annually. This is a physical and accumulating ETF, so the dividend income is reinvested in the investment product.

If you are interested in this ETF, you can find it in our ETF Core Selection. Check its KID here.

In addition to this list, you can find many more ETFs on our platform. We offer access to various market-specific ETFs that cover different categories. Check it out and find the right one that fits your investment strategy.

How do I choose an S&P 500 ETF?

Here's what you may want to consider when choosing an S&P 500 ETF:

Total expense ratio (TER)

The relatively low fees are one reason why ETFs have become so popular. The TER (total expense ratio) gives you a rough measure of the annual costs you need to pay to hold an ETF. It includes the various administrative, legal, operational and marketing costs incurred by the ETF provider and deducted from the returns. The TER, however, does not include trading costs or taxes.

Liquidity

When choosing an ETF, liquidity is an important factor to consider. A good level of liquidity means that you can buy and sell the ETF without significant problems and at a fair price. An ETF that is not traded often may be harder to sell. The bid-ask spread is a good indication of tradability. For ETFs that are not traded frequently, the spread can be relatively large.

Time in the market

It is wise to also look at how long an ETF has been in existence. ETFs that have been in the market for longer have a track record that shows how the price reacts to economic cycles and market conditions. Examining the past performance of ETFs can provide an insight into how stable an ETF is. However, it is important to note that past performance is no guarantee of future results.

Dividends

When choosing an S&P 500 ETF, it's important to consider dividends. With an accumulating ETF, the dividends are not paid to investors but reinvested automatically. In this way, your position may grow faster. These ETFs are more suitable for investors looking to build capital over a long period of time than for those seeking income. If you would like to receive dividends regularly, then you may choose a distributing ETF. In this way you’ll have a steady passive income, although dividend payments are not always guaranteed.

Investment strategy

ETFs can follow different investment strategies a passive approach, which simply replicates a benchmark index, or an active approach, which involves active portfolio management. It is important to understand which investment strategy you prefer and choose the ETF that best suits your preferences and return expectations.

Tracking difference

Before investing in an ETF, it’s a good idea to check and compare the tracking differences. This will help you understand the performance of your ETF. Tracking difference is the difference between the performance of the ETF and the performance of the index and it can be small or large, positive or negative.

What are S&P 500 ETFs?

An ETF is an investment product that tracks an index, commodity or bond. In the case of an S&P 500 ETF, it tracks the S&P 500 index. The purpose of this ETF is to track the stock market performance of the 500 largest US companies as closely as possible. In some cases, an ETF does not track the entire S&P 500, but only a specific business segment within the S&P 500. For example, the iShares S&P 500 Energy Sector UCITS ETF tracks all companies in the energy sector within the S&P 500.

There are several providers that issue S&P 500 ETFs. In general, the management fees charged by these providers are low. This is because, generally, ETFs are passive investment products and, unlike mutual funds, do not need to be actively managed. The composition of the index is not determined by the asset manager, but by S&P Dow Jones Indices.

ETFs can be physical or synthetic:

Physical ETF

To create an S&P 500 ETF, a provider buys shares of all the companies in the S&P 500 index. These stocks, and sub-sets of them, are then packaged into an ETF for you to buy.

Synthetic ETF

In the case of synthetic ETFs, the provider enters into an agreement with a counterparty, such as a bank. The provider never physically holds the shares but takes possession of the value of the shares through an exchange construction.

Accumulating and Distributing:

Accumulating ETF

With this type of ETF, the dividends paid by the underlying holdings within the ETF are reinvested into the fund by the fund manager at no extra cost. As a result, the value of the ETF increases.

Distributing ETF

Unlike accumulating ETFs, distributing ETFs pay out dividends to investors. This means you receive a cash flow and can use the money you receive as you wish.

Key takeaways

  • S&P 500 ETFs are exchange-traded funds that passively track the 500 largest companies in the US.
  • When choosing an S&P 500 ETF, you may want to consider several factors, including expense ratio, liquidity, time in the market, dividends and investment strategy.
  • ETFs that track the same index may have different expenses, different dividend structure and can also track a specific market segment within the index (e.g. S&P 500 Capped 35/20 Information Technology Index).

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The information in this article is not written for advisory purposes, nor does it intend to recommend any investments. Please be aware that facts may have changed since the article was originally written. Investing involves risks (e.g price volatility, currency or liquidity risk). You can lose your invested funds. Consider your knowledge and experience when making investment decisions. Past performance is not a reliable indicator of future results. Markets are volatile and can fluctuate significantly due to economic, political, regulatory, or other developments.

Sources: JustETF, iShares, Vanguard, LyxorETF, Invesco, Forbes

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Investing involves risks. You can lose (a part of) your invested funds. We advise you to only invest in financial products which match your knowledge and experience. This is not investment advice.

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