Which S&P 500 ETF?

FlexiBull

Newbie
4 0
I would like to invest some savings in an ETF. I should preface this by saying I'm very new to investing. I picked the S&P 500 as it has a good record and is fairly stable from what I can see and I want an accumulating ETF that will automatically reinvest for compound interest. Initially I was going with Vanguard (I'm based in the UK) on their own website but I then checked what was available on IG and it's got me a little unsure which one is better.

Vanguard S&P 500 UCITS ETF (VUSA):
  • OCF 0.07%
  • Prev 12 months performance: +22.42%
  • GBP

IG - Vanguard S&P 500 UCITS ETF (VUAA):
  • OCF 0.07%
  • Prev 12 months performance: +30.92%
  • GBP
Also, there's other S&P 500 ETFs on IG

iShares VII PLC - iShares Core S&P 500 UCITS ETF (GSPX):
  • OCF 0.10%
  • Prev 12 months performance: +40.78%
  • GBP
My main questions are:
  1. Why is there such a difference in previous performance between these S&P 500 ETFs?
  2. Even though the IG - Vanguard S&P 500 UCITS ETF (VUAA) is on the London Stock Exchange, it is in USD. Would I lose a lot via currency exchange rates?
  3. Being based in the UK, are there any other ETF providers that worth looking into?


Lastly, this caught my eye. Aside from I'm guessing increased risk, what's the catch?...

Blockchain Technologies ETF (HBLK)
  • OCF - N/A
  • Prev 12 months performance: +276.29%
  • CAD
 

1nvest

Well-known member
304 108
I would like to invest some savings in an ETF. I should preface this by saying I'm very new to investing. I picked the S&P 500 as it has a good record and is fairly stable from what I can see and I want an accumulating ETF that will automatically reinvest for compound interest. Initially I was going with Vanguard (I'm based in the UK) on their own website but I then checked what was available on IG and it's got me a little unsure which one is better.

Vanguard S&P 500 UCITS ETF (VUSA):
  • OCF 0.07%
  • Prev 12 months performance: +22.42%
  • GBP

IG - Vanguard S&P 500 UCITS ETF (VUAA):
  • OCF 0.07%
  • Prev 12 months performance: +30.92%
  • GBP
Also, there's other S&P 500 ETFs on IG

iShares VII PLC - iShares Core S&P 500 UCITS ETF (GSPX):
  • OCF 0.10%
  • Prev 12 months performance: +40.78%
  • GBP
My main questions are:
  1. Why is there such a difference in previous performance between these S&P 500 ETFs?
  2. Even though the IG - Vanguard S&P 500 UCITS ETF (VUAA) is on the London Stock Exchange, it is in USD. Would I lose a lot via currency exchange rates?
  3. Being based in the UK, are there any other ETF providers that worth looking into?


Lastly, this caught my eye. Aside from I'm guessing increased risk, what's the catch?...

Blockchain Technologies ETF (HBLK)
  • OCF - N/A
  • Prev 12 months performance: +276.29%
  • CAD
Hi FlexiBull. Those are in USD and yes you will be affected by the rate. You can get GBP hedged ETFs. for example IGUS
this is one of the most popular GBP hedged S&P500 by Ishares/blackrock.

regard to the question of why performance differs: VUAA vs VUSA for example. VUSA is income, so you will receive the dividend. VUAA is accumulating, which means that dividends are automatically reinvested. typically the accumulating will outperform the income

hope this helps
 
G

Guest36985

0 0
I would like to invest some savings in an ETF. I should preface this by saying I'm very new to investing. I picked the S&P 500 as it has a good record and is fairly stable from what I can see and I want an accumulating ETF that will automatically reinvest for compound interest. Initially I was going with Vanguard (I'm based in the UK) on their own website but I then checked what was available on IG and it's got me a little unsure which one is better.

Vanguard S&P 500 UCITS ETF (VUSA):
  • OCF 0.07%
  • Prev 12 months performance: +22.42%
  • GBP

IG - Vanguard S&P 500 UCITS ETF (VUAA):
  • OCF 0.07%
  • Prev 12 months performance: +30.92%
  • GBP
Also, there's other S&P 500 ETFs on IG

iShares VII PLC - iShares Core S&P 500 UCITS ETF (GSPX):
  • OCF 0.10%
  • Prev 12 months performance: +40.78%
  • GBP
My main questions are:
  1. Why is there such a difference in previous performance between these S&P 500 ETFs?
  2. Even though the IG - Vanguard S&P 500 UCITS ETF (VUAA) is on the London Stock Exchange, it is in USD. Would I lose a lot via currency exchange rates?
  3. Being based in the UK, are there any other ETF providers that worth looking into?


Lastly, this caught my eye. Aside from I'm guessing increased risk, what's the catch?...

Blockchain Technologies ETF (HBLK)
  • OCF - N/A
  • Prev 12 months performance: +276.29%
  • CAD

Trust me I'm a doctor*:​

SG S&P X5 Daily Long GBP​


*Not actually a doctor this is not trading advice!
 
  • Haha
Reactions: 1nvest

FlexiBull

Newbie
4 0
Hi FlexiBull. Those are in USD and yes you will be affected by the rate. You can get GBP hedged ETFs. for example IGUS
this is one of the most popular GBP hedged S&P500 by Ishares/blackrock.

regard to the question of why performance differs: VUAA vs VUSA for example. VUSA is income, so you will receive the dividend. VUAA is accumulating, which means that dividends are automatically reinvested. typically the accumulating will outperform the income

hope this helps
Thanks for the info 1invest. With regards to tax and currency conversion. If I choose an accumulating ETF that automatically reinvests the dividend, will I be taxed on this by the U.S or will I only be taxed when I eventually sell the etf? I'm planning on using a UK ISA for the investment and so UK tax shouldn't be an issue. Same question with the currency conversion, is the dividend converted to GBP and then back to USD even though it's automatically being reinvested?

I didn't know about hedged ETFs, thanks i'll take a look at those.
 

1nvest

Well-known member
304 108
Thanks for the info 1invest. With regards to tax and currency conversion. If I choose an accumulating ETF that automatically reinvests the dividend, will I be taxed on this by the U.S or will I only be taxed when I eventually sell the etf? I'm planning on using a UK ISA for the investment and so UK tax shouldn't be an issue. Same question with the currency conversion, is the dividend converted to GBP and then back to USD even though it's automatically being reinvested?

I didn't know about hedged ETFs, thanks i'll take a look at those.
No you wont be taxed on the US side. Chances are you wont have the ability to choose a US ETF.
all of the ones you mentioned, and IGUS are they are all UK ETFs, and on LSE and thereby under UK tax
The dividend will already be in USD, this is then accumulated with the overall USD price and then that price is converted. Your exposure will be on the price, no need to think about the dividend aspect

There are others which may significantly outperform S&P. Vanguard have a fund VVUSEI. SEDOL B5B71Q7
this looks more at both large and small cap. in the same time VUSA has grown by 220% since 2012, then i just suggested has risen by 338%. Take a look around basically
 

FlexiBull

Newbie
4 0
No you wont be taxed on the US side. Chances are you wont have the ability to choose a US ETF.
all of the ones you mentioned, and IGUS are they are all UK ETFs, and on LSE and thereby under UK tax
The dividend will already be in USD, this is then accumulated with the overall USD price and then that price is converted. Your exposure will be on the price, no need to think about the dividend aspect

There are others which may significantly outperform S&P. Vanguard have a fund VVUSEI. SEDOL B5B71Q7
this looks more at both large and small cap. in the same time VUSA has grown by 220% since 2012, then i just suggested has risen by 338%. Take a look around basically
Thanks again, there are just so many ETFs it's hard to know how to begin narrowing down. One more question if you don't mind. From what I can see, some ETFs are made up of stocks that all pay dividends, whereas some only have a mix of stocks that do and do not pay dividends. How does an ETF with hardly any dividend paying stocks give a yearly return to the investor (regardless of whether that is in dividends or accumulation)?
 

1nvest

Well-known member
304 108
Thanks again, there are just so many ETFs it's hard to know how to begin narrowing down. One more question if you don't mind. From what I can see, some ETFs are made up of stocks that all pay dividends, whereas some only have a mix of stocks that do and do not pay dividends. How does an ETF with hardly any dividend paying stocks give a yearly return to the investor (regardless of whether that is in dividends or accumulation)
all depends what the objective is..S&P500 just tracks the 500. regardless of dividend yield
then there are ETFs that follow momentum stocks, value stocks etc. Nothing to do with the dividend. without detail its difficult to comment, but if its nature was a dividend generating ETF, then i'd be expecting them to be including dividends
The other problem is, you dont know who's paying a dividend now, but may have in the past, may in the future.
very difficult to comment on
a good site i find is "justetf.com" helps narrow down what you're looking for
 
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Reactions: CavaliereVerde

FlexiBull

Newbie
4 0
all depends what the objective is..S&P500 just tracks the 500. regardless of dividend yield
then there are ETFs that follow momentum stocks, value stocks etc. Nothing to do with the dividend. without detail its difficult to comment, but if its nature was a dividend generating ETF, then i'd be expecting them to be including dividends
The other problem is, you dont know who's paying a dividend now, but may have in the past, may in the future.
very difficult to comment on
a good site i find is "justetf.com" helps narrow down what you're looking for

I always thought it was better to go with an ETF that has a high dividend? Otherwise, how does your investment grow?

Vanguard have a fund VVUSEI. SEDOL B5B71Q7
this looks more at both large and small cap. in the same time VUSA has grown by 220% since 2012, then i just suggested has risen by 338%. Take a look around basically

I took a look at this. It's listed for professional investors rather than individual investors and isn't listed on JustETF either. What makes this only for professionals?
 

1nvest

Well-known member
304 108
I always thought it was better to go with an ETF that has a high dividend? Otherwise, how does your investment grow?



I took a look at this. It's listed for professional investors rather than individual investors and isn't listed on JustETF either. What makes this only for professionals?
Better, not necessarily, a dividend is one source of income, and capital growth is another. It doesn't always mean you have both. you may have a stock that goes down in price, yet still pays 5% per annum. would you rather capital appreciation, or the dividend income
Now, capital appreciation AND income, well that's your ultimate goal. I'm just not interested in the income side. i just want to accumulate the balance and then my income ultimately flows from. I always go for accumulation ETFs/funds

And as for VVUSEI, apologies i should have made it clear when i said fund. Its a mutual fund rather than an exchange traded fund. so you wouldnt find it on Just ETF, you would find it on your SIPP or ISA provider who would allow you to deal in mutual funds, apologies if im going off topic. just like i said, an alternative thats all.
 

new_trader

Legendary member
6,665 1,489
Things I look at when choosing an ETF:

  • Is it a physical or derivative (swap based) ETF?: I will only buy physical ETF's
  • Is it a passive/rule based or actively managed ETF?: I only buy passive/rule based ETF's.
  • Is it a hedged or unhedged ETF?: I avoid hedged ETF's like the plague and only buy unhedged ETF's
  • Does the ETF engage in security lending?: If possible, I avoid any ETF that lend underlying stocks.
  • Is it an accumulating or distributing ETF?: I avoid where possible accumulating ETF's.
  • Is it a replicating or optimised ETF?: If possible, I avoid optimised ETF's.
 
 
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