Difference in S&P ETFs

What’s the difference between all these?

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I have also wanted to know but scared to ask

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I have recently been looking at which S&P to follow. I was drawn to the GSPX and have done as much research as I can, before getting overwhelmed. There is some chatter on the different funds and currencies in which they invest, but it looks like any fund difference is minimal. From what I can gather, if you have a fund worth £10 a share and one worth £100 a share, you literally have 10x the investment in the £100 option. It is obviously easier to accumulate the smaller value option and buy 1 X £10 a week rather than putting £100 in straight away. Ultimatly you would have the same stake though. This is just my understanding and I’m sure than someone will correct me if wrong, and obviously do your own research etc.

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Well, just accounting for different providers already eliminates half of the entries.
The second factor is accumulating vs. distributing.
Then there is hedged vs unhedged.

There are even more potential differences, but that should cover the above.

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I’ve also wondered, I just assumed they all track the same 500 companies obviously. The only difference being the prices making different entry points depending on affordability .

I’m sure there’s a lot more to it than that but that’s how I’ve looked at it

I’m assuming the more expensive funds track more efficiently than the cheaper funds, so potentially giving higher returns.

No, not necessarily. Some newer funds will be priced cheaper, and sometimes funds that get too expensive will split into smaller/new funds so that investors can continue to invest.

It isn’t a case of the more expensive stuff being better.

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Ok, there are quite a few differences; let’s start with the big one:

  1. The little circle on the left shows the provider/issuer of the etf, “V” stands for Vanguard, Ishares is Ishares by Blackrock and the third one (HSPX) is HSBC (keep in mind that in freetrade HSBC funds are available only with freetrede PLUS). Now based on the different issuer/variations, but even among the same issuer (as you can see there are 2 Vanguard and 3 Ishares) there are even more differences.

  2. One of those is the replication method, since these funds are trying to track an index (here the s&p500) there are different ways to do it. Vanguard and HSBC are using something called “full replication”, which means they are trying to track ALL the companies within the index. Ishares uses “optimized sampling”, so they have a fancy statistical way of choosing some companies in order to replicate the index.

  3. Another difference is the expense ratio, that is how much you have to pay per year in order to keep the fund. Most of the Vanguard and Ishares ones cost 0.07%, while the HSBC one 0.09%.

  4. A pretty big difference is whether the fund is distributing (IUSA, VUSA and HSPX) or accumulating (CSP1 and VUAG). The former means that the dividends are being payed back to you in cash, while the latter automatically reinvests the dividends within the fund.

  5. By the way since I mentioned dividends, if you take into account only the distributing ones, there are differences based on how frequently the dividend is payed. VUSA and IUSA pay quarterly (4 times per year), while HSPX Semi annually (twice per year).

  6. For the sake of completeness, I will add another difference, which is whether the fund is currency hedged or not. All these funds are unhedged, which means that the value of the fund might change based on the pound/dollar exchange rate. tl;dr if the pound increases its value compared to the dollar the fund performs worse and vice versa. Freetrade actually has a GBP hedged etf (IGUS). If you choose this you won’t have to worry about the pound/dollar relationship, but it is more expensive (0.20% expense ratio).

There are other differences like the fund size, but I would say the ones above are the most important.

Let me sum things up. The main differences are:

  • The issuer
  • The replication method
  • The expense ratio
  • Distributing or accumulating
  • How often they pay dividends
  • Hedged or unhedged
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Great reply. Makes perfect sense now.

You’ll find that everything except tracker expenses evens out over the year. Freetrde is of course free, but in general, you wouldn’t own more than one because of dealing expenses.