iShares Core S&P 500 UCITS (CSPX / IUSA) vs. Vanguard S&P 500 UCITS ETF (VUSD / VUAA/VUSA )

I like to write about ETFs as I have the majority of my stock portfolio in ETFs I find them a passive way to invest money wisely and they don’t require much maintenance in terms of keeping track of stocks etc. For me, it is more of a set-and-forget approach instead of keeping track of all companies in a portfolio. In this article, we are looking at the iShares Core S&P 500 UCITS ETF vs Vanguard S&P 500 UCITS ETF.

An exchange-traded fund is represented as a stock in the stock market so by holding this specific stock you are holding a basket of stocks that correspond to an index (portfolio benchmark) that it is tracking.

I already have an article in detail that goes through the iShares Core S&P 500 UCITS ETF in detail, both ETFs are very similar therefore in this article I am going through the specific differences and what sets them apart.

Accumulating vs Distributing

This ETF is available in two versions an accumulating and a distributing version. IUSA (iShares) and VUSD (Vanguard) are the distributing versions this means that the dividend payments are distributed to the shareholders while CSPX (iShares) and VUAA (Vanguard) are accumulated instead. This may have tax implications as dividends may not be taxed when it is paid out to the shareholders, of course, this has to do with the local jurisdiction and their specific laws. Secondly, using an accumulated version means that dividends are reinvested immediately instead of the shareholder having to reinvest manually.

The current benchmark/portfolio

These are basically the same so no need to go in-depth into these funds as they seek to track the performance of an index composed of 500 large-cap U.S. companies and therefore the top 10 holdings are the same.

The top 10 holdings:

1. Apple Inc. - 6%

2. Microsoft Corp. - 5%

3. Amazon.com inc. - 3%

4. Berkshire Hathaway inc. - 2%

5. Alphabet Inc. Class A - 2%

6. Alphabet Inc. Class C - 1%

7. Exxon Mobil Corp. - 1%

8. UnitedHealth Group Inc. - 1%

9. Johnson & Johnson -1%

10. Nvidia Corp. - 1%

This also translates into sector diversification

The top 5 sectors:

1. Technology -26%

2. Health Care - 15%

3. Financials - 12%

4. Consumer discretionary- 10%

5. Industrials - 9%

Issuers

CSPX / IUSA is issued by Ishares and VUSD / VUAA by Vanguard, both very reputable and large investment companies, and therefore I see no issues for both of them as a company.

Expense Ratio

When it comes to the expense ratio both ETFs have an expense ratio of 0.07% which is very low and therefore very good.

Performance

Since this is a more growth-oriented ETF I want to look at how well the accumulated versions of both have been able to track their index and which has performed better overall. Purely looking at capital appreciation over the last years both CSPX and VUAA have increased by 46% (from 2019 to 2023) at the time of writing, therefore are no differences there either even though CSPX has performed very slightly better by some decimal percentages. One thing to note is the entry price for Vanguard is lower than iShares therefore Vanguard may be more interesting in case of a smaller investment amount as it is about 1/5th of the amount of the iShares ETF.

Conclusion

Both ETFs are very similar the main differences lie in the issuer Vanguard vs iShares and the amount available to invest. However, I think the bigger question is whether to choose a distributing or an accumulating version of the ETF.

Disclaimer: I am not a financial advisor, this blog is centered around my opinion and should not be viewed as legal, professional, or financial advice. For me, it's crucial to supplement my knowledge with resources like videos, articles, and books to deepen my understanding of investing principles and strategies.

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