VUSD vs. CSPX - which S&P 500 ETF is better?

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
Topic Author
RandomWalking
Posts: 66
Joined: Sun Nov 29, 2015 12:11 pm

VUSD vs. CSPX - which S&P 500 ETF is better?

Post by RandomWalking »

If an investor can buy and hold shares of a S&P 500 ETF, which alternative VUSD or CSPX is better to purchase for a non-US person?

VUSD is the Vanguard S&P 500 UCITS ETF.

CSPX is the iShares Core S&P 500 UCITS ETF.

VUSD Fact Sheet:
https://global.vanguard.com/portal/site ... docId=2108

CSPX Information
CSPX Fact Sheet
CSPX KIID
CSPX Prospectus

Thanks.
Morik
Posts: 736
Joined: Tue Nov 25, 2014 12:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Morik »

0. Why S&P 500 index instead of total US market index? (Just wanted to see if you gave the total market index any thought.)

1. Use whichever you would pay lower commission for. If same on both, then it doesn't matter IMO. Both track the same index and both have the same fee (0.07%). Since they track the same index, I'd expect turnover to be about the same as well (I couldn't find listed turnover rate on CSPX, vanguard shows a 5% turnover rate.)
Topic Author
RandomWalking
Posts: 66
Joined: Sun Nov 29, 2015 12:11 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by RandomWalking »

Morik wrote:0. Why S&P 500 index instead of total US market index? (Just wanted to see if you gave the total market index any thought.)
Because I am NRA (non-resident alien) and advised to use Ireland domiciled ETFs by Bogleheads forum, I can only use S&P 500 index as proxy to total US market index. I cannot find total US market index or ETF that is also Irish-domiciled.

Actually a comparison of S&P 500 ETFs' performance (on etf.com or justetf.com I cannot remember which) showed VUSD and CSPX had slightly different performances over the past year. Surprisingly, a S&P 500 ETF that had a relatively very high expense ratio compared to VUSD and CSPX, outperformed VUSD and CSPX. But being a Boglehead wannabee, I think I should stick to low cost ETFs. Because cost matters.
Topic Author
RandomWalking
Posts: 66
Joined: Sun Nov 29, 2015 12:11 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by RandomWalking »

According to the stock chart shown on CSPX Information, CSPX outperforms its benchmark S&P 500 by a positive fraction of a per cent. How is this possible?

I thought an ETF would always underperform the benchmark index it is tracking because of total expense ratio, etc.
Tylenol Jones
Posts: 312
Joined: Mon Sep 14, 2009 6:54 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Tylenol Jones »

I'd use VUSD because of the general reputation of Vanguard and to support some competition for European investment market (I think iShares reduced ETF costs there only once Vanguard entered the market). On the other hand, since it's always good to diversify as much as possible, you should buy 50-50 VUSD-CSPX to have some institutional diversification if it doesn't cost you anything.
User avatar
JoMoney
Posts: 11540
Joined: Tue Jul 23, 2013 5:31 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by JoMoney »

I'm a U.S. investor so don't have any familiarity with these particular options, but I'm a big fan of Vanguard and their cost cutting ethos.
Both of these look like reasonable options as far as I can see.
You can compare them against the S&P500 index directly over here with these Morningstar charts:
CSPX
VUSD
VUSD doesn't have as much history, but over the period available it does seem to have been ever so slightly closer to the index.
Over the three years 2013 through 2015
$10,000 in the S&P500 index would have a total return growth to $15,259.29
CSPX would have grown to $15,063.18 (0.43% less than the index annualized for the 3 years)
compared to VUSD $15,079.82 (0.40% less than the index annualized for the 3 years)
..hardly anything, could be "noise"
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Topic Author
RandomWalking
Posts: 66
Joined: Sun Nov 29, 2015 12:11 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by RandomWalking »

Morik wrote:(I couldn't find listed turnover rate on CSPX, vanguard shows a 5% turnover rate.)
I checked that CSPX has a turnover rate of 16%.

How does a difference of turnover rates between ETFs affect the preference for one ETF over the other? For example, does 5% vs. 16% turnover rate mean one should prefer VUSD to CSPX? Or is the difference insignificant?
fblade007
Posts: 48
Joined: Mon Jul 11, 2016 2:58 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by fblade007 »

Bringing up this old thread.

Is it correct that VUSD distributes the dividends while CSPX iShare is reinvesting then for you already?

If that is the case I would go for CSPX and not VUSD
Morik
Posts: 736
Joined: Tue Nov 25, 2014 12:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Morik »

RandomWalking wrote:
Morik wrote:(I couldn't find listed turnover rate on CSPX, vanguard shows a 5% turnover rate.)
I checked that CSPX has a turnover rate of 16%.

How does a difference of turnover rates between ETFs affect the preference for one ETF over the other? For example, does 5% vs. 16% turnover rate mean one should prefer VUSD to CSPX? Or is the difference insignificant?
2 reasons.

1. 3x the turnover means 3x the trading which means 3x the commissions. Not the commissions you pay to buy the fund, but the commissions paid by the fund when acquiring it's assets.
Those higher commissions mean more cost to you.
I'm not positive, but I believe those fees aren't in the net expense ratio.

http://www.wsj.com/articles/SB100014240 ... 0954870722 seems to back me up on that though.

2. Those extra trades can result in more capital gains distributions.
In a taxable account that means more taxes.
Just as with dividends, the cap gain distribution directly lowers NAV, you reinvest it, and have the same total value as before (slightly higher# of shares, slightly lower value per share, same total value). Except for the taxes you pay on the distribution that is.
(Doesn't matter if held in tax-advantaged accounts.)

Though maybe his doesn't apply to etfs, only mutual funds (except some vanguard funds)?
Morik
Posts: 736
Joined: Tue Nov 25, 2014 12:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Morik »

fblade007 wrote:Bringing up this old thread.

Is it correct that VUSD distributes the dividends while CSPX iShare is reinvesting then for you already?

If that is the case I would go for CSPX and not VUSD
That seems to match what I found on their info page. Does that mean no taxes on dividends?
Tylenol Jones
Posts: 312
Joined: Mon Sep 14, 2009 6:54 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Tylenol Jones »

Morik wrote:
fblade007 wrote:Bringing up this old thread.

Is it correct that VUSD distributes the dividends while CSPX iShare is reinvesting then for you already?

If that is the case I would go for CSPX and not VUSD
That seems to match what I found on their info page. Does that mean no taxes on dividends?
No, US taxes dividends of both of these ETFs at 15% and then VUSD distributes and CSPX reinvests what is left.
fblade007
Posts: 48
Joined: Mon Jul 11, 2016 2:58 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by fblade007 »

Tylenol Jones wrote:
No, US taxes dividends of both of these ETFs at 15% and then VUSD distributes and CSPX reinvests what is left.
But from what I have read the difference long term is only the time you have to spend re-investing it yourself (VUSD) whereas CSPX doest it all automatically for you.. no biggie?
User avatar
BeBH65
Posts: 1742
Joined: Sat Jul 04, 2015 7:28 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by BeBH65 »

Tylenol Jones wrote:
Morik wrote:
fblade007 wrote:Bringing up this old thread.

Is it correct that VUSD distributes the dividends while CSPX iShare is reinvesting then for you already?

If that is the case I would go for CSPX and not VUSD
That seems to match what I found on their info page. Does that mean no taxes on dividends?
No, US taxes dividends of both of these ETFs at 15% and then VUSD distributes and CSPX reinvests what is left.
This is a correct statement related to the taxation 'the Irish fund has to pay' to the US.
In addition there is the taxation that the investor will need to pay on the dividends the fund distributes or reinvest herself.
- in most European countries dividends which are distributed are taxed
- many European countries dividends that are capitalized by the fund are not taxed. some of these countries will tax the gains when you sell the fund, some won't.

Have a look at Accumulating/capitalizing_vs._distributing_ETF_share_classes and Nonresident_alien_with_no_US_tax_treaty_and_Irish_ETFs
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
vstariradev
Posts: 56
Joined: Wed Nov 02, 2016 9:43 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by vstariradev »

BeBH65 wrote:
Tylenol Jones wrote:
Morik wrote:
fblade007 wrote:Bringing up this old thread.

Is it correct that VUSD distributes the dividends while CSPX iShare is reinvesting then for you already?

If that is the case I would go for CSPX and not VUSD
That seems to match what I found on their info page. Does that mean no taxes on dividends?
No, US taxes dividends of both of these ETFs at 15% and then VUSD distributes and CSPX reinvests what is left.
This is a correct statement related to the taxation 'the Irish fund has to pay' to the US.
In addition there is the taxation that the investor will need to pay on the dividends the fund distributes or reinvest herself.
- in most European countries dividends which are distributed are taxed
- many European countries dividends that are capitalized by the fund are not taxed. some of these countries will tax the gains when you sell the fund, some won't.

Have a look at Accumulating/capitalizing_vs._distributing_ETF_share_classes and Nonresident_alien_with_no_US_tax_treaty_and_Irish_ETFs
What is the name of the 15% tax which the US is applying to the dividends of VUSD and CSPX funds before they reach Ireland? I'd like to read up on it.

There is Dividend Withholding Tax in Ireland which applies to residents of Ireland but not to other EU investors (if I understand correctly). For investors in other EU countries, the tax depends on the Dividend Withholding Tax for each country. For example in Bulgaria the law says that, if the taxation applied abroad is lower than 5% or non-existing in the country issuing the dividends then a 5% tax must be applied in Bulgaria.

It's all clear but here is where it gets tricky (for me at least):
Since the fund is domiciled in Ireland but trades in US, is the dividend issuing country in this case Ireland (which doesn't apply a tax) or is it the US (which already taxed the dividends with 15%)?

Thanks for all the informative content in this topic, it's great.
Neuralgia
Posts: 40
Joined: Tue Mar 23, 2021 5:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Neuralgia »

Sorry to bring up an old thread, but Vanguard has now, in 2021 VUAA (Started 23 July 2019)
https://www.justetf.com/en/etf-profile. ... 00BFMXXD54
https://global.vanguard.com/portal/site ... ocId=31840

0.22% TER (higher than CSPX and VUSD 0.07%)

PS: It's weird, in some places it mentions 0.22 TER, and in some other 0.07%)
Last edited by Neuralgia on Sat May 01, 2021 11:09 pm, edited 3 times in total.
GregG3
Posts: 63
Joined: Thu Oct 08, 2020 5:13 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by GregG3 »

Neuralgia wrote: Sat May 01, 2021 10:42 pm Sorry to bring up an old thread, but Vanguard ha now, in 2021 VUAA (Started 23 July 2019)
https://www.justetf.com/en/etf-profile. ... 00BFMXXD54

0.22% TER (higher than CSSPX and VUSD 0.7%)
VUAA and VUSD have expense ratio of 0.07%, NOT 0.7%
Neuralgia
Posts: 40
Joined: Tue Mar 23, 2021 5:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Neuralgia »

I was editing my post when you mentioned this.

JustETF seems to have a glitch when comparing

Image
User avatar
tre3sori
Posts: 257
Joined: Wed Jul 24, 2019 3:13 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by tre3sori »

I don't see the glitch. :confused
The Vanguard FTSE All-World UCITS ETF tracks a different index and the TER of 0.22% is correct.
Let every man divide his money into three parts, and invest a third in land, a third in business, a third let him keep by him in reserve. Talmud | 35% Real Estate, 45% Stocks, 15% Bonds, 4% Gold, 1% Cash
User avatar
Justfinance
Posts: 13
Joined: Tue Mar 23, 2021 5:09 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Justfinance »

Me either :sharebeer Vanguard FTSE All World is the one to go if you are looking for the one and only worldwide ETF - US reflects about 60%. No glitches therefore
Neuralgia
Posts: 40
Joined: Tue Mar 23, 2021 5:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Neuralgia »

tre3sori wrote: Sun May 02, 2021 2:38 am I don't see the glitch. :confused
The Vanguard FTSE All-World UCITS ETF tracks a different index and the TER of 0.22% is correct.
https://www.justetf.com/en/etf-profile. ... 4#overview

The comparison I was looking AT (and that I posted) has a glitch. The same ETF, in its own page has a 0.07%.

The pdf I linked in my original post has also the 0.07% TER.
Genghis
Posts: 70
Joined: Fri Jun 26, 2020 6:53 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Genghis »

I still don’t see the glitch.
The OCF of the two S&P 500 ETFs is 0.07%.
The OCF of the Vanguard FTSE All World ETF is 0.22%.
All showing correct in my opinion.
no6
Posts: 1
Joined: Thu May 06, 2021 12:28 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by no6 »

VUAA under Vanguard site shows ocf 0.07%
User avatar
galeno
Posts: 2312
Joined: Fri Dec 21, 2007 12:06 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by galeno »

VUSD for non US investors. VOO for US investors.

A non-US investor should hold VWRD as his only UCITS equity EFT.

A US investor should hold VTI as his only equity ETF.
KISS & STC.
Neuralgia
Posts: 40
Joined: Tue Mar 23, 2021 5:26 pm

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by Neuralgia »

I'm trying to find the asset allocation of VUSD (VUAA).

How much in US? Non-US developed? Non-US Developing?
User avatar
BeBH65
Posts: 1742
Joined: Sat Jul 04, 2015 7:28 am

Re: VUSD vs. CSPX - which S&P 500 ETF is better?

Post by BeBH65 »

VUAA is simply the vanguard sp500 UCITS ETF. 100%US.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles
Post Reply