Why do similar ETFs cost different amounts?

Investing and Markets 📈
#1

Hi all,

I noticed the iShares S&P500 costs roughly £27 while the Vanguard S&P500 costs roughly £51.

Is this just based on each providers minimum, to an extent arbitrary starting point, or is there a more elaborate reason for the different prices? And related to this I’m wondering what sort of analysis you do to decide on which one to invest in?

Many thanks for the replies!

#2

arbitrary starting point

Pretty much this

#3

What Alex said +

  • whether the ETF distributes or accumulates the income,
  • different inception dates,
  • a higher cost will lower the compounding return of the index over time,
  • different tracking error to the actual index
  • …

Don’t focus too much on the price, but do check which version (distr. or acc.) and what the fees are (look for ocf or ter). iShares and Vanguard are the 2 main providers :slight_smile:

#4

The ETF value and market price are not the same things. The price is defined by the provider and it is an arbitrary number. The only benefit is that a “cheaper” ETF is easier to manage as you can be more precise with your allocation.