Sixty-five UCITS funds track the S&P 500, and on price they have very nearly stopped competing: eighteen of them charge 0.05% a year or less, and the difference between the cheapest and the eighteenth is about two euros a year on a 10,000 EUR position. When a ranking's top eighteen are within two basis points, the ranking has stopped being the interesting part.
S&P 500 ETFs
70 funds, cheapest 20 shown. 1 has no published fee.
Showing all 20 funds
See the full comparison →The famous ones are not the cheap ones
The two funds most European investors could name are not in the table above. The best-known Vanguard and iShares S&P 500 trackers both charge 0.07%, putting them around twenty-fifth and twenty-eighth on this list — more than double the fund at the top.
That sounds worse than it is. Doubling 0.03% still only reaches 0.07%, about four euros a year on 10,000 EUR, and both are among the largest and most heavily traded funds here, which buys tighter spreads. It is a good illustration of the general point rather than an argument against them.
The tax is bigger than the fee
Every company in this index is American, so every dividend it pays crosses the US border and is taxed on the way out. A fund that owns the shares pays that tax — 15% for an Irish-domiciled UCITS fund under the Ireland–US treaty, against the 30% a fund without treaty access would suffer. That works out at roughly 0.18% a year — about nine times the two basis points separating the first and eighteenth rows above.
That much is also true of a global index, and the cheapest MSCI World ETFs works through the same arithmetic where only seventy per cent of the index is American.
What is specific to the S&P 500 is the escape route.
Some of these funds own nothing
Several funds in this table hold no American shares at all. They hold a basket of collateral and enter a total return swap: a bank pays them the index return, and in exchange receives the return on the collateral.
Under US rules a swap referencing a qualifying broad-based index is not a dividend payment, so there is nothing to withhold. A synthetic fund can therefore be paid the gross index return — the return before the tax a physical fund cannot avoid. The advantage does not depend on where the fund is domiciled, which is why Luxembourg funds sit level with Irish ones in this table instead of behind them, and it is the single most useful thing to know before reading the ranking as a straight list.
It is not free. The tax saving is a property of the structure, not a promise: it depends on the fund continuing to qualify, and US treatment of index swaps has been revised before. And a swap trades a tax cost for a counterparty — if the bank on the other side fails, the collateral is what stands behind your holding. Neither point makes synthetic funds a bad choice. Both make "lowest TER wins" a bad way to read this page.
Where to go from here
Thirty-seven of these funds are Irish, twenty Luxembourgish, seven French and one German — a split that means much less here than it does on a global index, for the reason above.
The fund page behind each row carries the holdings, the listings and the tracking record, and the screener will sort the whole universe on any of them.
If what worries you is less the fee than how much of the index sits in a handful of companies, S&P 500 equal weight ETFs looks at the version that gives every company the same slice, and at what that has cost since 2023.