Best S&P 500 ETF UK – Compare Top ETFs 2021

If S&P 500 ETF’s are something you would like to get involved in, you’ve come to the right place. This guide on Best S&P 500 ETF UK will provide you with all you need to know to make the right decision when you invest in an ETF. Within this guide, we will touch on some of the best S&P 500 ETFs right now, how to choose which ETF is best for you, along with the best broker to invest with.

Best S&P 500 ETF UK 2021 List

Here is a quick rundown of the best S&P 500 ETF UK to consider in 2021. A more detailed analysis of each ETF will be provided in the next section.

  1. SPDR S&P 500 ETF – Overall Best S&P 500 ETF UK – Invest Now
  2. Vanguard S&P 500 ETF – One of the Most Popular S&P 500 ETF Globally – Invest Now
  3. iShares Core S&P Small-Cap ETF – Best S&P 500 ETF UK to Invest in Small-Cap Equities – Invest Now
  4. iShares Core S&P Mid-Cap ETF – Best S&P 500 ETF UK to invest in Mid-Cap Equities
  5. SPDR S&P Biotech ETF – Best S&P 500 ETF UK to Get Exposure to the Biotech Sector
  6. ProShares Short VIX Short-Term Futures ETF – Best S&P 500 ETF UK for Volatility Trading
  7. Invesco S&P 500 Low Volatility – Best S&P 500 ETF UK for Low Volatility
  8. ProShares Ultra S&P 500 – Best S&P 500 ETF UK for Greater Returns
  9. SPDR Portfolio S&P 500 Growth ETF – Best S&P 500 ETF UK for Growth
  10. SPDR S&P 500 UCITS ETF – Best S&P 500 ETF UK for Great Performance and Dividends

Best S&P 500 ETFs UK Reviewed

As you can see above, there are a variety of the best ETFs that are based on the S&P 500 index. Each ETF has its own individual focus, meaning there is an option for every risk appetite. However, with so many to choose from, it can be difficult to analyse them all and decide which one suits you best.

In the section below, we will touch on each of the S&P 500 ETFs mentioned above, providing you with critical information you need to make informed investment decisions.

1. SPDR S&P 500 ETF – Overall Best S&P 500 ETF UK

The SPDR S&P 500 ETF is one of the most popular ETF’s globally and is included in a vast number of people’s portfolios. It tracks the S&P 500 index’s performance, and will buy shares of 500 mid-cap and large-cap US equities.

etoro sp500 price chart best s&p 500 etf

This ETF is fantastic for its diversification benefits, as it includes stocks from sectors such as IT, healthcare, financial services, industrials, and more. The three most heavily weighted within this ETF are Apple, Microsoft, and Amazon.

If you invest in this ETF, you are essentially investing a portion of money into each constituent of the S&P 500. The size of the portion depends on the ETF’s weighting, so if you invested in the SPDR ETF, you would have more of an ‘investment’ in Apple, Microsoft and Amazon than you would in the other equities within the fund.

If this fund has piqued your interest, you can invest with FCA-regulated eToro commission-free. With a minimum investment of only $50, equating to around £36, this can give you a great chance at making significant annual returns.

Your capital is at risk.

2. Vanguard S&P 500 ETF – One of the Cheapest S&P 500 ETFs

Like the previous fund, the Vanguard S&P 500 ETF tracks the performance of the S&P 500 index, investing in all 500 constituents. This is a great way to get exposure to a wide range of US companies.

What’s great about this ETF is its incredibly low expense ratio. A lot of ETF’s charge expense ratios creep close to 1% each year; although it doesn’t sound like much, it can add up if you invest more significant amounts. The Vanguard S&P 500 ETF only charges 0.07%, so if you invest £1000 in it for a year, you will only have to pay 70p in fees!

etoro vanguard sp500 etf

With assets under management of $26.8billion, this ETF is incredibly popular worldwide. What’s more, it even pays a quarterly dividend – meaning you will receive a cash payment every three months, calculated as a percentage of your investment.

Your capital is at risk.

3. iShares Core S&P Small-Cap ETF – Best S&P 500 ETF UK to Invest in Small-Cap Equities

If you like the idea of investing in the S&P 500 but want to gain more exposure to small-cap stocks, then this is for you. This fund tracks the performance of a selection of small-cap US equities rather than mid-cap or large-cap funds.

best s&p 500 etf uk etoro small cap

Although not technically an S&P 500 ETF, this fund is ideal for people interested in tracking the S&P 500 and want to potentially earn greater returns. Small-cap stocks are an inherently riskier investment, so they come with greater volatility; however, they also allow for greater returns. Over the last ten years, this ETF has exhibited solid past performance, generating an average annual return of 11.89%.

Your capital is at risk.

4. iShares Core S&P Mid-Cap ETF – Best S&P 500 ETF UK to invest in Mid-Cap Equities

Similar to the previous ETF, the iShares Core S&P Mid-Cap ETF invests in a selection of US equities based on the S&P 500. However, as the name implies, this fund focuses more on mid-cap stocks. Again, although not strictly an S&P 500 ETF, this fund is similar in the sense that it utilises some of the same elements and attempts to replicate or even beat the returns generated by the S&P 500.

etoro mid cap etf

One great thing about this ETF is it pays a quarterly dividend, meaning you get a nice cash bonus every three months. What’s more, over the long-term, it has generated a pretty good return for investors, averaging approximately 9.52% each year. If this ETF is something you’d be interested in investing in, why not use eToro? You can invest commission-free, and your account can be set up and ready in as little as ten minutes!

Your capital is at risk.

5. SPDR S&P Biotech ETF – Best S&P 500 ETF UK to Get Exposure to the Biotech Sector

The biotech sector is one of the hottest industries to invest in, including firms such as United Therapeutics, Novo Nordisk, and Regeneron Pharmaceuticals. Investing in an S&P 500 ETF that provides exposure to the biotech sector is an attractive prospect for many traders, as the potential returns are enormous, especially with the R&D boost that the Coronavirus pandemic has caused.

etoro biotech etf best s&p 500 etf

The SPDR S&P Biotech ETF derives its investments from companies that operate within the biotech sector. The majority of the companies within this ETF are small-cap, with a few being classed as mid-cap. Due to this, it is a little riskier than an investment in a typical S&P 500 ETF.

With an expense ratio of 0.35%, it is one of the cheapest ETFs out of the ten we are suggesting here. Showcasing returns of over 32% over the past six months alone, this ETF is one of the best to invest in if you are looking for more significant returns and are happy to look at a more high risk investment.

Your capital is at risk.

6. ProShares Short VIX Short-Term Futures ETF – Best S&P 500 ETF UK for Volatility Trading

This S&P 500 ETF is slightly different from the others in terms of how it makes a return. Rather than generating a return based on the movements of the underlying S&P 500, this ETF instead generates a return based on VIX futures. These futures are contracts based on the VIX, an index that tracks the volatility of another asset (in this case, the S&P 500).

best s&P 500 etf etoro sp500 volatility

Although this may seem confusing, it can be thought of as a way to speculate on how volatile the market will be at a particular time. However, with this best VIX ETF, you are speculating on the inverse of what will happen.

Unlike other ETFs, this one provides investors with short exposure who seek to profit from decreases in the volatility of the S&P 500. If you think that the S&P 500 will be less volatile over the next six months, you could invest in this ETF and make a return if your prediction comes true!

Your capital is at risk.

7. Invesco S&P 500 Low Volatility – Best S&P 500 ETF UK for Low Volatility

This ETF is ideal for risk-averse investors who prefer to earn a lower return but experience greater security for their capital. The Invesco S&P 500 Low Volatility makes this possible by tracking the returns of the S&P 500 Low Volatility index, which is made up of equities that are less risky but tend to generate a lower return.

etoro low risk sp500

If you are an investor that likes the idea of placing some money into an ETF and just leaving it for an extended period, this might be ideal for you. You can invest in the Invesco S&P 500 Low Volatility ETF with eToro without having to pay any commissions. What’s more, with a minimum investment of only $50, you put yourself in a solid position to compound your returns over many years to create a significant level of income.

Your capital is at risk.

8. ProShares Ultra S&P 500 – Best S&P 500 ETF UK for Greater Returns

ProShares are one of the world’s most popular ETF and bond providers, being traded on various exchanges. The ProShares Ultra S&P 500 offers an investment that aims to double the daily performance of the S&P 500 index before fees and expenses.

etoro best sp500 etf uk

This ETF has a slightly higher expense ratio of 0.91% – still pretty negligible in the grand scheme of things. However, the fund has recorded an impressive return of 50.21% over the past year alone. Although this is an outlier, it showcases the type of returns that this ETF can produce. If you are interested in a slightly riskier ETF but with the potential to create much more significant growth, then this might be one worth considering.

Your capital is at risk.

9. SPDR Portfolio S&P 500 Growth ETF – Best S&P 500 ETF UK for Growth

Another ETF offered by SPDR is the S&P 500 Growth ETF. This fund aims to replicate the S&P 500 Growth Index’s performance, which comprises equities that exhibit ‘growth’ characteristics. These characteristics can take many forms but typically highlight a company that is expected to grow at a higher rate than the market average.

etoro growth best sp500 etf

This ETF has experienced an incredible 68.62% return in the last year alone. However, since January of this year, it is currently down 0.51% overall. This highlights the volatile nature of investing in growth stocks. Also, it has a very cheap expense ratio of only 0.04% annually. So, if you like the idea of frugal investing with a potential for market-beating returns, it might be worth researching the SPDR Portfolio S&P 500 Growth ETF.

Your capital is at risk.

10. SPDR S&P 500 UCITS ETF – Best S&P 500 ETF UK for Great Performance and Dividends

The final ETF we are going to touch on today is the SPDR S&P 500 UCITS ETF. This ETF is a great all-rounder – it aims to make a similar return to the S&P 500 index whilst also providing a reliable quarterly dividend to investors.

etoro best sp500 etf uk

In 2020, this ETF returned 13.46%, which is a solid return considering the scale of the Coronavirus pandemic. Furthermore, this ETF has an expense ratio of only 0.09%, making it fall in line with other cheap ETFs. Finally, with a 12-month dividend yield of 1.25%, you can receive a solid quarterly payment that adds to this ETF’s attractiveness.

Your capital is at risk.

How to Choose the Best S&P 500 ETFs to Invest in

As the above section highlights, there are numerous S&P 500 ETFs to choose from. The question is – which one is right for you?

In this section of the guide, we will discuss the elements you need to consider when deciding which is the best S&P 500 ETF UK to invest in.

What sort of returns are you looking to make?

The first thing to consider is the returns you would like to make. Are you someone who is looking for an easy 7-10% annual return? Or would you prefer an investment that can net you 30%+ every year? This question is vital in determining which S&P 500 ETF to invest in.

Looking at the S&P 500 over the past ten years, the index has returned an average of 13.6% each year. If you had invested in an ETF based on the S&P 500, this is the sort of return you can expect on average. This is a larger return than the FTSE 100 traded on the London Stock Exchange, which only returned an average of 7.38% per year.

However, if you are looking for more significant returns, it might be worth considering an ETF such as the SPDR S&P Biotech ETF. This fund is focused on the companies within the S&P 500 that operate within the biotechnology sector; thus, it is riskier but can provide better returns. For example, in the past year alone, this ETF has returned 65.89% to investors.

What is your tolerance for risk?

Another crucial element you must consider is your risk tolerance. Although the S&P 500 is thought of as a ‘safe’ investment in some circles, this does not mean it is 100% risk-free. In the past ten years, it has only made a negative annual return in one year; however, this highlights that there is always that element of risk when investing in these kinds of ETFs.

If you are the type of person who prefers a lower-risk investment and is happy to settle for lower returns, then an ETF such as the Invesco S&P 500 Low Volatility ETF might be ideal for you. This ETF has lower volatility than the regular S&P 500 ETF, which is excellent if you prefer lower-risk assets. What’s more, this ETF can be traded commission-free using eToro!

What are the fees charged when investing in S&P 500 ETFs?

The nature of ETFs means that there will always be a small percentage of fees attached; this is often referred to as the expense ratio. However, ETFs are popular due to the low level of these fees relative to other assets such as mutual funds.

If you invest in S&P 500 ETFs UK with eToro, the only thing you need to pay is this small expense ratio – eToro does not charge any commissions on ETF investments. This expense ratio varies depending on the fund but is usually negligible; for example, the Vanguard S&P 500 ETF charges only 0.07% per year. This means that if you invested £1000 in this ETF with eToro, you’d only be charged 70p for the entire year.

Best S&P 500 ETF UK Investment Platforms 2021

After you have determined which S&P 500 ETF is best for you, the next step involves choosing an appropriate investment platform. There are various options available to investors these days, each one offering a different selection of features and varying fee structures.

To help you decide, we have chosen our two best stock brokers for investing in an S&P 500 ETF. The section below discusses the features and fees associated with each one.

1. eToro – Invest in S&P 500 ETFs with 0% Commission

etoro logo

eToro is the favoured broker of a vast number of investors in the UK, and for a good reason. Boasting over 20 million users worldwide, eToro has grown exponentially over the past decade. As an FCA-regulated broker, eToro allows users to trade a huge number of securities, including stocks, ETFs, commodities, forex, and more.

In terms of S&P 500 ETFs, eToro offers a wide selection for you to choose from. If you take a look at their offering, there are S&P 500 ETFs tailored to each individual’s goals – whether you want a low-volatility ETF or an ETF that focuses on large-cap stocks, eToro will be able to provide it. What’s more, you do not have to pay any commissions when investing in ETFs with eToro!

etoro etfs

The only charge you will need to pay is the expense ratio. This ratio refers to the small commissions that are paid to the company that provides the ETF. For example, the SPDR S&P 500 ETF only charges 0.095% for the entire year.

eToro also doesn’t charge any monthly account fees or deposit fees either – which means you get to keep a larger portion of the profits you make through your investments. The minimum investment in S&P 500 ETFs is only $50, which makes them very accessible to a large number of traders. As an example of potential returns, if you invested $1000, and the ETF returned 10% each year for three years running, you would have $1331 at the end of the third year thanks to compounding.

etoro sp500 etf

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Finally, eToro offers many options to deposit into your account, including credit card, debit card, bank transfer, PayPal, and more. Also, you can be safe in the knowledge that eToro is regulated by the FCA, along with the Financial Services Compensation Scheme (FSCS). Being regulated by these two organisations means that eToro must comply with the strictest security standards, meaning you can be sure that your money is protected.

Pros:

  • Super user-friendly online trading platform
  • Buy S&P 500 ETFs without paying any commission
  • Trade CFDs in the form of stocks, indices, commodities, forex, and more
  • Huge range of ETFs to choose from
  • Deposit funds with a debit/credit card, e-wallet, or UK bank account
  • Ability to copy the trades of other users
  • FCA and FSCS protections

Cons:

  • Not suitable for advanced traders that like to perform technical analysis

67% of retail investors lose money trading CFDs at this site

2. Libertex – Trade S&P 500 ETFs with ZERO Spread and Leverage

libertex logo

If eToro doesn’t take your fancy, our second favourite broker to trade S&P 500 ETFs with is Libertex. Libertex was founded back in 1997 and boast approximately 2.2 million users across 27 different countries. They are regulated by the Cyprus Securities and Exchange Commission (CySEC), ensuring the safety and security of money being invested on the Libertex platform.

Libertex specialises in CFD trading, which means they offer contracts based on an asset’s underlying price movements rather than the asset itself. Libertex has a decent selection of ETFs for investors to choose from, including the SDPR S&P 500 ETF Trust. This ETF includes the firms that comprise the S&P 500 index and allows investors to gain exposure to the US equity market.

libertex etf

One of the great things about Libertex is that they operate under a zero-spread model. Usually, brokers will charge a lower bid price than they do for an ask price – with the difference between the two being the ‘spread’ and reflects the broker’s cut of the trades. However, Libertex does not charge a spread whatsoever, meaning that you get the best prices when investing in their ETF range.

Furthermore, their commissions are very low, providing a cost-effective way to invest in an S&P 500 ETF or if you’re looking at how to invest in Dow Jones UK. Also, as mentioned earlier, Libertex is a CFD broker – meaning that when you trade ETFs with them, you do not own the underlying assets. This means that you can use leverage when investing with Libertex; they offer up to 1:5 leverage on their ETFs, which allows you to boost your potential returns.

Finally, Libertex even offers a demo account you can utilise, meaning you can get a feel for their trading platform before investing for real. If you decide to take the plunge, you can deposit into your account via several methods, such as debit card, credit card, bank transfer, or e-wallet. With minimum deposits of only £10, it is a quick and easy process to get started with Libertex.

Pros:

  • Zero spread CFD trading
  • Very competitive commissions
  • Good educational resources
  • Long established broker
  • Trade stocks and indices like the Dow Jones
  • Compatible with MT4
  • Great choice of markets

Cons:

  • Only offers CFDs

83% of retail investors lose money trading CFDs at this site.

How to Buy the Best S&P 500 ETFs UK

Now that you’ve discovered some of the best S&P 500 ETFs available and have had a think about which ones would be best for you – it’s time to discuss how to make your S&P 500 ETF investment.

In the following section, we will walk you through the step-by-step process of investing in an S&P 500 ETF with our chosen broker eToro – this can all be completed in under 10 minutes and commission-free!

Step 1: Open an Account and Upload ID

The first step is to open your eToro account. The fastest way to do this is by heading to the eToro website on your browser, or opening their investment app, and clicking sign up.

etoro sign up

67% of retail investors lose money trading CFDs at this site

Then all you need to do is follow the instructions and provide the requested details, such as your name, date of birth, and address. You’ll also need to enter your National Insurance number and mobile number.

Step 2: Verify Your Identity and Address

As eToro is regulated by the Financial Conduct Authority (FCA), you must verify your identity and address. This can be done online by uploading proof of ID (a passport or driver’s license) and proof of address (a bank statement or utility bill).

These documents usually only take a few minutes to be verified by eToro. Once this is completed, you can move onto the next step.

Step 3: Make a Deposit

eToro allows you to deposit funds into your account in a variety of ways. The fastest and easiest is through your credit card or debit card, but you can also deposit through PayPal, Skrill, Neteller, or bank transfer.

Step 4: Search for Your Chosen S&P 500 ETF

If you have an idea of which ETF you would like to invest in, simply click on the search bar above and type its name in. In the example below, we are using the SDPR S&P 500 ETF. Once you have found the correct one, click the ‘Trade’ button.

etoro sp500

67% of retail investors lose money trading CFDs at this site

If you’d like, you can also click on the ‘Markets’ button on your homepage’s left side and then browse the available ETFs that way.

Step 5: Complete your investment in S&P 500 ETF

The last step involves opening your position in the ETF. Simply enter the amount you’d like to invest, and click the ‘Open Trade’ button.

invest in sp500 with etoro

And that’s it! You have now officially invested in an S&P 500 ETF, all without paying any fees!

Conclusion

To summarise, investing in S&P 500 ETFs are a fantastic way to earn a passive income. As these ETFs comprise firms from the US equity market, they provide an avenue to positive annual returns, along with supplying great diversification benefits to your portfolio.

As mentioned in this guide, there are a wide variety of ETFs to choose from, each one with its own merits. However, you must heed investment advice and do your own due diligence before investing in an S&P 500 ETF.

If you have done the research and are interested in placing some money in an S&P 500 ETF, we recommend using eToro for this. With eToro, you can invest in these ETFs without having to pay any commission whatsoever. In addition, you can have an account set up and ready to invest in as little as 10 minutes!

eToro – Invest in S&P 500 ETFs UK with 0% Commission

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

Who are the best ETF providers in the UK?

A selection of the best ETF providers in the UK are Vanguard, iShares (Blackrock), Invesco, and SPDR.

What is the minimum to invest in an S&P 500 ETF?

This all depends on your chosen broker. At eToro, the minimum investment in an S&P 500 ETF is only $50, equating to approximately £36.

Are S&P 500 ETFs a good long-term investment?

Definitely! S&P 500 ETFs are an excellent long-term investment, as they will provide you with passive returns over a more extended period. As the S&P 500 has an average annualised return of 10% since inception, the chances are that if you were to leave your capital in one of these ETFs for many years, you would experience a positive return.

What type of returns can I get by investing in an S&P 500 ETF?

You can experience great returns with an S&P 500 ETF; in 2019, the S&P 500 index returned 31.49% and then returned 18.40% in 2020. Over the past ten years, annual returns have only been negative once (in 2018). So in terms of an S&P 500 ETF, is it likely that you can experience single or double digital returns on your investment on average over the longer term.

Are S&P 500 ETFs a risky investment?

It depends on the specific ETF that is being invested in. With an S&P 500 ETF that invests in all 500 companies, this would be less risky than other S&P 500 ETFs as the diversification benefits would eradicate a lot of the risk. However, if you chose an S&P 500 ETF that focused on small-cap stocks, this would be inherently riskier.

Connor Brooke

About Connor Brooke PRO INVESTOR

Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has extensive knowledge in the investing space, and has also written two theses on mutual funds and the UK market.

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