Best S&P 500 ETFs for Belgians 2024

Why an S&P 500 ETF is a great investment for Belgians

S&P 500 stands for the Standard & Poor’s 500 index. As the name suggests, it seeks to track the performance of a composition of the 500 largest American companies. Through the S&P 500, you get exposure to a large section of the US economy as it covers 80% of the total American market capitalisation.

The graph below shows that the S&P 500 has returned an average return of 10.4% per year since 1992. That’s a considerable return, especially if you began investing in the early nineties. The American stock market has outperformed the rest of the world these past decennia.

Lastly, index investing through ETFs are the best way for most people to invest and grow their savings:

• Low-cost. ETFs and index funds are inexpensive to run and are therefore cheap for investors. As we'll see, you can invest in S&P 500 ETFs from as low as 0.05% per year.
• Diversified. One of the goals of index investing is to diversify as much as possible. By diversifying across many countries and sectors, you eliminate unnecessary risk.
• Rooted in the real economy. Most index funds and ETFs invest either in stocks or bonds. Those are backed by real companies, with real factories, employees, intellectual property, and so on. This is unlike, for example, the crypto industry, where the value of a currency or token is mostly determined by its potential rather than by concrete applications.
• Tax-efficient. Capital gains on stocks are not taxed in Belgium.
• Start investing with low amounts. You don't need a large sum upfront to start investing in ETFs, making it accessible to anyone (for instance for young people).

Read our beginner's guide to index investing if you wish to know more about the benefits of index investing through ETFs.

How the S&P 500 ETFs are compared

We will compare the S&P 500 ETFs below based on:

• Distribution of dividends. From a taxation point of view, accumulating funds are preferred over distributing funds to avoid paying a 30% tax on dividends.
• Domicile. Luxembourg and Ireland have special tax treaties with the US that make it attractive to set up funds there. As a Belgian investor, you can benefit from this by investing in funds that are domiciled in one of these two countries.
• Currency. If you buy a fund that is not traded in Euro (€), the broker will likely convert it for you. But this comes at an additional cost.
• Size. Larger funds are less likely to be shut down.
• Replication. Physical replication is preferred over synthetic replication to reduce third-party risk.
• Cost. Fund managers charge a fee for managing their funds. The total cost of a fund is indicated by the total expense ratio (TER). Naturally, the cheaper the better!
• Broker fee. Depending on your broker and the stock exchanges the ETF is trading, some S&P 500 ETFs can be more or less expensive than others in terms of broker fee.
• Sustainability. Some ETFs follow a sustainable version of the S&P 500, where some companies have been excluded based on ethical views.

Read more on the criteria to select an ETF if you wish to know more.

The best S&P 500 ETFs for Belgians

Based on these criteria, we selected the following S&P 500 ETFs:

The cheapest S&P 500 ETFs are Invesco's S&P 500 ETFs IE00B3YCGJ38 (accumulating) and IE00BYML9W36 (distributing), both having a total expense ratio of 0.05%. If you are looking for physical rather than synthetic replication, we suggest you look at Xtrackers' IE000Z9SJA06, iShares' IE00B5BMR087 or Vanguard's IE00BFMXXD54. Finally, iShares' ESG S&P 500 ETF (IE000R9FA4A0) is a good option if you're looking for a sustainable ETF.

Read on for an in-depth comparison.

Xtrackers S&P 500 Accumulating (IE000Z9SJA06)

With a total expense ratio of just 0.06%, this is one of the cheapest S&P 500 ETFs available.

✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on the Borsa Italiana stock exchange.

❌ Size. The fund was launched in 2022 and at the time of writing in February 2023, it had only €5 million in assets. That's very small. And small funds are more likely to be shut down because they become profitable for the fund provider only after reaching a certain size.

✅ Replication. The fund is physically replicated.

✅ Cost. With a total expense ratio of 0.06%, the fund is one of the cheapest S&P 500 ETFs available.

❌ Broker fee. The fund is not available through Euronext stock exchanges, meaning that the broker fee is high on average.

❌ Sustainability. The fund invests in all companies in the S&P 500 index, no matter how "bad" they are from an environmental, social or governance point of view.

iShares Core S&P 500 Accumulating (IE00B5BMR087)

iShares is a brand of BlackRock, one of the largest asset managers in the world. They are known to have a wide selection of cheap ETFs. This fund is the largest S&P 500 ETF available in Europe!

✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on several stock exchanges.

✅ Size. The fund is the largest S&P 500 ETF available on the market, with over €50 billion under management.

✅ Replication. The fund is physically replicated.

✅ Cost. With a total expense ratio of 0.07% (slightly more expensive than the previous ETF), the fund is one of the cheapest S&P 500 ETFs available.

✅ Broker fee. The fund is available on Euronext exchanges, making the broker fee lower on average.

❌ Sustainability. The fund invests in all companies in the S&P 500 index, no matter how "bad" they are from an environmental, social or governance point of view.

Vanguard S&P 500 Accumulating (IE00BFMXXD54)

Just like BlackRock, Vanguard is one of the largest asset fund providers and offers many index funds at a low price.

✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on several stock exchanges.

✅ Size. It has a bit over €5 billion in assets.

✅ Replication. The fund is physically replicated.

✅ Cost. At 0.07%, it has the same price as the previous iShares ETF.

❌ Broker fee. The fund is not available through Euronext stock exchanges, meaning that the broker fee is high on average.

❌ Sustainability. The fund invests in all companies in the S&P 500 index, no matter how "bad" they are from an environmental, social or governance point of view.

Invesco S&P 500 Accumulating (IE00B3YCGJ38)

At a total expense ratio of 0.05%, this fund is the cheapest S&P 500 ETF available on the market. But it comes at a small increase in risk, because the fund synthetically replicates the index instead of actually buying the stocks in the index.

✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on several stock exchanges.

✅ Size. It has over €11 billion in assets.

❌ Replication. The fund is synthetically replicated. This means that instead of buying each stock in the S&P 500, it uses financial engineering to replicate its performance by doing a swap with another financial institution. This poses an additional risk compared to physical replication.

✅ Cost. At 0.05%, it's the cheapest S&P 500 ETF on the market.

✅ Broker fee. The fund is available on Euronext exchanges, making the broker fee lower on average.

❌ Sustainability. The fund invests in all companies in the S&P 500 index, no matter how "bad" they are from an environmental, social or governance point of view.

Invesco S&P 500 Distributing (IE00BYML9W36)

This ETF shares being the cheapest S&P 500 ETF with the previous Invesco ETF. However, this fund is distributing, meaning that it pays out the dividends instead of reinvesting them into the fund. This is less tax-efficient in Belgium because of the tax on dividends.

❌ Distribution of dividends. The fund is distributing, meaning that you have to pay a 30% tax on dividends.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on several stock exchanges.

✅ Size. It has over €1.6 billion in assets.

❌ Replication. The fund is synthetically replicated. This means that instead of buying each stock in the S&P 500, it uses financial engineering to replicate its performance. It does so through a swap with another financial institution. This poses an additional risk compared to physical replication.

✅ Cost. At 0.05%, it's the cheapest S&P 500 ETF on the market.

❌ Broker fee. The fund is not available through Euronext stock exchanges, meaning that the broker fee is high on average.

❌ Sustainability. The fund invests in all companies in the S&P 500 index, no matter how "bad" they are from an environmental, social or governance point of view.

iShares S&P 500 ESG Accumulating (IE000R9FA4A0)

The particularity of this fund is that it tracks a sustainable variant of the S&P 500 index, namely the S&P 500 ESG index (ESG stands for "Environmental, Social and Governance").

✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

✅ Domicile. The fund is domiciled in Ireland, a tax-efficient location.

✅ Currency. The fund can be traded in euro on the XETRA stock exchange.

❌ Size. It has just €22 million in assets, which is small.

✅ Replication. The fund is physically replicated.

✅ Cost. At 0.07%, it's one of the cheapest S&P 500 ETFs on the market.

❌ Broker fee. The fund is not available through Euronext stock exchanges, meaning that the broker fee is high on average.

✅ Sustainability. The fund excludes companies that are involved are involved in thermal coal, tobacco, controversial weapons (including nuclear weapons), small arms, military contracting and oil sands, as well as companies that are in the bottom 5% of the United Nations Global Compact score. As a consequence, it invests in only 300 of the 500 companies in the S&P 500.

How to buy the S&P 500

There are three steps:

1. Choose the S&P 500 ETF that fits you best using our comparison above.
2. Open an account with a broker. Our comparison of brokers can help you choose.
3. Place an order!

Follow our step-by-step guide to investing in the S&P 500.

The downsides of the S&P 500

The S&P 500 is a good index to invest in, but it does have some downsides:

• it's concentrated in the US stock market
• it consists of only the largest companies
• it's volatile, meaning its price fluctuates a lot

Concentrated in the US stock market

The S&P 500 represents only about 40% of the global stock market. This means that by investing in the S&P 500, you leave aside returns from many other companies around the world. For instance, countries like China or Brazil have the potential to grow significantly over the next decades.

The US stock market has performed exceptionally well during the last 50 years compared to most other countries in the world. But the past does not guarantee future returns. The American economy may continue to do well over the next 50 years, but it also may not. Betting on one single country like the US, no matter how dominant its market is at the moment, increases the likelihood of a bad outcome.

Consists of only the largest companies

The S&P 500 is made up of only the largest American companies. But good investment returns can be achieved in mid-size and smaller companies too. Just like it pays off to diversify across multiple countries, it's a good idea to spread across different company sizes as well.

Volatile

Lastly, the stock market is volatile. So a sole investment in the S&P 500 index may not match your risk profile. We’ve previously written about the role of bonds in your portfolio and you ideally want a portfolio that helps you sleep easy at night. Putting all your eggs in one basket is probably not ideal, especially if the economy of that country starts to falter.

Curvo, a more diversified alternative to the S&P 500

The philosophy of index investing is to diversify as much as possible to lower risk. Instead of being exposed to just a single country like the United States, we think it's better to invest in as many countries, regions and sectors as possible.

At Curvo, we strongly believe that index investing is the best way for most Belgians to grow their wealth and prepare for their financial future. And we built Curvo to make index investing accessible to all Belgians.

The Growth portfolio is a great alternative to the S&P 500 index. The portfolio, along with the other portfolios, is managed by NNEK, a Dutch investment firm licensed by the Dutch regulator (AFM). It's composed of two funds, both offered by Vanguard:

• FTSE Developed All Cap Choice index (ISIN: IE00B5456744)
• FTSE Emerging All Cap Choice index (ISIN: IE00BKV0W243)

Together, these funds cover the entire world and are a good approximation to an investment in the world economy.

More diversified than the S&P 500

The indexes in the Growth portfolio are globally diversified, and they include smaller companies too. As a consequence, Growth invests in over 7,500 companies spread across 40 countries, compared to the 500 companies in an S&P 500 ETF. This allows you to broaden your investments and not make a bet on one single country or company size.

Sustainable

Sustainable investing is challenging because everyone has different beliefs and values. The funds chosen in Growth focus on one guiding principle: they don't invest in companies that are considered destructive to the planet. This means the following sectors are excluded:

• non-renewable energy (nuclear power, fossil fuels)
• vice products (adult entertainment, alcohol, gambling, tobacco)
• weapons (civilian firearms, military weapons)
• controversial companies that do not meet the labour, human rights, environmental and anti-corruption standards defined by the United Nations Global Compact

No transaction tax

Each of the S&P 500 ETFs we discussed is liable for the Belgian transaction tax. You need to pay this tax every time you buy or sell an ETF. But one advantage of Curvo is that the Belgian transaction tax is not applicable. This means you’re saving between 0.12% and 1.32% per transaction depending on the ETF you choose.

All your money is invested

Your investments work with fractional shares meaning that all your money is invested. When buying your own ETFs, you're required to buy whole units of shares. This can make it much harder to do invest monthly (which we recommend!) because you may have to wait several months until you've saved enough to buy a single share. You'll also always be left with some cash on your brokerage account.

You don't encounter these issues with the Growth portfolio. You can start investing from the first month, from €50, and every cent will be invested for you. You can also set up a saving plan to send contributions monthly and put your investments on autopilot.

Portfolio tailored to you

Next to Growth, you can invest in other portfolios, each suited for a different financial goal and appetite for risk. Each of these portfolios were built and are managed by NNEK. When you sign up to Curvo, you are asked a couple of questions to determine your goal and the risk you are seeking. NNEK then matches you with the portfolio that's best suited to you.

Explore how Curvo works if you want to learn more.

Buying ETFs is usually cheaper

Investing in one of NNEK's portfolios through Curvo is usually more expensive than buying ETFs through a broker. The fee starts from 0.6% “all-in” on your total investments, but provides you with peace of mind as everything is taken care of: taxes, rebalancing, purchases, etc...

Summary

We discussed six S&P 500 ETFs available to Belgians. We assessed each based on several criteria, such as cost, size, strategy for the distribution of dividends, and sustainability. The resulting comparison table should help you decide which S&P 500 ETF is best for you.

Investing in the S&P 500 also carries some downsides. Most importantly, it concentrates all your investment in a single country, namely the United States. The American stock market has performed exceptionally well over the last decades, but that's no guarantee it will continue over the next decades. Diversifying across many different countries is a way to reduce the likelihood of a bad outcome.

We built Curvo as the best and most diversified way for Belgians to grow their wealth through index investing. Through for example the Growth portfolio, you can get exposure to over 7,500 companies from 40 different countries.

Questions you may have

What is the best S&P 500 ETF?

There's no single right answer, and it depends on what criteria is most important to you.

• The cheapest are the two Invesco S&P 500 ETFs (IE00B3YCGJ38 and IE00BYML9W36) with a total expense ratio of 0.05%.
• The largest ETF is the iShares Core S&P 500 Accumulating ETF (IE00B5BMR087) with over €50 billion in assets under management.
• The ETF with the lowest share price is the Xtrackers S&P 500 Accumulating (IE000Z9SJA06), which trades at around €7.00 in February 2023.
• A sustainable S&P 500 ETF is iShares S&P 500 ESG Accumulating (IE000R9FA4A0), which excludes companies that are destructive to the planet.

What is the cheapest S&P 500 ETF in Europe?

The cheapest S&P 500 ETFs in Europe are the Invesco S&P 500 ETFs:

• The accumulating fund IE00B3YCGJ38.
• The distributing fund IE00BYML9W36.

Note that both funds are synthetically replicated.

Which companies are in the S&P 500?

There are 500 companies in the S&P 500 index (hence the name!). All are American. The top 10 companies in the index are:

1. Apple
2. Microsoft
3. Amazon
4. Google
5. Berkshire Hathaway
6. Nvidia
7. Exxon Mobil
8. UnitedHealth
9. Johnson & Johnson
10. JPMorgan Chase