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Best S&P 500 ETFs UK to Watch

Disclaimer Fact Checked

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 10 S&P 500 ETFs in the UK will explore some of the important features of this class of ETFs.

Key Points on S&P 500 ETFs in the UK

  • There are heaps of ETFs that track the S&P 500 index, allowing most investors with a range of risk tolerances to gain exposure to the index via ETFs.
  • Typically the only fees you’ll have to pay when trading ETFs is the expense ratio which can be as low as 0.07%.

10 Popular S&P 500 ETFs UK List

Here is a rundown of 10 popular S&P 500 ETFs UK based on trading volume. A more detailed analysis of each ETF will be provided in the next section.

  1. SPDR S&P 500 ETF
  2. Vanguard S&P 500 ETF
  3. iShares Core S&P Small-Cap ETF
  4. iShares Core S&P Mid-Cap ETF
  5. SPDR S&P Biotech ETF
  6. ProShares Short VIX Short-Term Futures ETF 
  7. Invesco S&P 500 Low Volatility
  8. ProShares Ultra S&P 500
  9. SPDR Portfolio S&P 500 Growth ETF 
  10. SPDR S&P 500 UCITS ETF

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S&P 500 ETFs UK Reviewed

As you can see above, there are a variety of 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.

In the section below, we will touch on each of the S&P 500 ETFs mentioned above.

1. SPDR S&P 500 ETF

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.

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2. Vanguard S&P 500 ETF

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 ETF has a 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.

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3. iShares Core S&P Small-Cap ETF

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.

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4. iShares Core S&P Mid-Cap ETF

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 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 some return for investors, averaging approximately 9.52% each year.

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5. SPDR S&P Biotech ETF

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.

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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.

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6. ProShares Short VIX Short-Term Futures ETF

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).

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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 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!

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7. Invesco S&P 500 Low Volatility

The Invesco S&P 500 Low Volatility tracks 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.

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8. ProShares Ultra S&P 500

ProShares are an ETF and bond provider, 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.

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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.

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9. SPDR Portfolio S&P 500 Growth ETF 

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.

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10. SPDR S&P 500 UCITS ETF

The final ETF we are going to touch on today is the SPDR S&P 500 UCITS ETF. This ETF 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.

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Fundamentals of S&P 500 ETFs

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

Returns

The first thing to consider is the returns you would like to make.

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.

Risk tolerance

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.

Fees

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.

S&P 500 UK Brokers

After you have determined which S&P 500 ETF is 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 stock brokers for investing in an S&P 500 ETF. The section below discusses the features and fees associated with each one.

1. Capital.com

capital

Capital.com offers a CFD platform for that is a good choice for beginner traders. It is easy to install and use this platform. Capital.com may not have as many bells and whistles as some of the other trading platforms, but it also does not have an excessive number of extraneous features that obstruct your trade. This is crucial since it allows you to swiftly enter, exit, and manage trades when utilizing the Capital.com platform.

This means that Capital.com is suitable for both traders who are suited to more active trading techniques as well as beginners seeking for a beginner platform to get started on. Scalpers are included here. With scalpers, you can swiftly enter and exit the markets, so having a platform that can meet all of your demands is essential. If this describes you, you should think about Capital.com.

capital com

Capital.com’s comprehensive commerce and education tools are one of its standout features.

You may discover a wide variety of trading tips, informative videos, and even an app called InvestMate that is intended to assist you with your trading on their website.

Another important factor that attracts novice and new traders to Capital.com is that there is that the minimum deposit is just £20. This makes the platform an appealing option, as does the fact that you may deposit and withdraw money fast using a variety of methods.

83.45% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. eToro

etoro-neweToro has over 20 million users worldwide and 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.

etoro sp500 etf

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.

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Conclusion

To summarise, investing in S&P 500 ETFs is one potential 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 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.

Frequently Asked Questions on  S&P 500 ETFs UK

Who are some ETF providers in the UK?

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

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

Are S&P 500 ETFs a risky investment?

Connor Brooke author check sign 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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