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What's the difference between all the s&p 500's?

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  • 29-02-2020 12:05am
    #1
    JackieChang
    Registered Users Posts: 1,494 ✭✭✭


    As a noob investor I was told if you want to go long term invest in an ETF. Which is what I want to do. No interest in calls or puts.

    I've been looking around and saw there are at least 20 s&p 500 ETFs available around the world, all in various states of growth/decline and price.

    The s&p tracks the performance of 500 top companies. So why do they all have different states of growth if they're tracking the same thing?

    And how can I figure out which one to start depositing in?


Comments

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    #2
    garrettod
    Registered Users Posts: 2,420 ✭✭✭garrettod


    JackieChang wrote: »
    As a noob investor I was told if you want to go long term invest in an ETF. Which is what I want to do. No interest in calls or puts.

    I've been looking around and saw there are at least 20 s&p 500 ETFs available around the world, all in various states of growth/decline and price.

    The s&p tracks the performance of 500 top companies. So why do they all have different states of growth if they're tracking the same thing?

    And how can I figure out which one to start depositing in?

    Hi,

    One consideration is costs. Some managers charge more than others, so while they may ask track the S&P500, some will deduct more fees than others.

    Have a look at the offerings from the likes of Vanguard and Ishare, both are usually quite competitive.

    Then there's also tracking error.

    Thanks,

    G.



  • Options
    #3
    Diarmuid
    Registered Users Posts: 3,981 ✭✭✭Diarmuid


    Not a lot.
    The fees, the volume, the error from the index.

    I'd tend to stick with the big names like Vanguard.

    EDIT: Your bigger issue is finding an ETF that you can invest in, in a tax efficient manner. (ie the 8 year deemed disposal rule)


  • Options
    #4
    JackieChang
    Registered Users Posts: 1,494 ✭✭✭JackieChang


    Diarmuid wrote: »

    EDIT: Your bigger issue is finding an ETF that you can invest in, in a tax efficient manner. (ie the 8 year deemed disposal rule)

    Jesus, never heard of that. Just had a google... 41%. I'm using one of those trading apps at the moment.

    How can I invest in a tax efficient manner? Complete noob here, would appreciate some pointers.

    My work doesn't do pensions by the way.

    Will I get taxed if the gains are "unrealized" i.e. I never take them out until I'm 92 years old?


  • Options
    #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 9,988 Mod ✭✭✭✭Jim2007


    JackieChang wrote: »
    The s&p tracks the performance of 500 top companies. So why do they all have different states of growth if they're tracking the same thing?

    And how can I figure out which one to start depositing in?


    There is no difference in terms of objective and usually very little difference in terms of execution either. However the actual products are structured to suit different investors. For instance some will just pay out dividends as they receive them, more will reinvest the dividends and pay out nothing, while others will make capital payments rather than dividends and yet more are designed to minimize the withholding taxes on dividends.


    So the starting point for you is to decide which type of product suits your situation. For example in my case I will choose ones that either reinvest the dividends or make capital repayments because there is no capital gains tax on investors here (Switzerland), but my US ex-pat colleague looks for funds that minimizes the withholding taxes because he no longer files US tax returns and can't claim back the withholding taxes.


    Once you know the type of product that suits you best the next step is to compare the products to find the right one:
    - Check the tracking error: how close does the fund follow the selected index
    - The expense ratio
    - Currency exposure: hedging costs money


    And so on.


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