CSPX vs VUSA vs IUSA – My Thoughts

A US ETF is usually the core of most investors’ portfolios. For Europeans, the questions of CSPX vs VUSA or VUSA vs IUSA often pop up.

In this post, I’ll do my best to answer the trilemma and give my recommendation.

Table of Contents

CSPX

Ticker symbols: CSPX, SXR8, CSP1

CSPX (iShares Core S&P 500 UCITS ETF (Acc.)) is an ETF tracking the S&P 500 – an index composed of the largest US companies weighted by market-cap.

It has a TER of 0.07% and it’s an accumulating fund (it reinvests the dividends instead of distributing them to investors).

Currently, the fund manages $55b worth of assets.

CSPX is one of the go-to options for the US allocation of many investors.

IUSA

Ticker symbols: IUSA, IDUS

IUSA (iShares Core S&P 500 UCITS ETF) is also an ETF tracking the S&P 500 offered by iShares.

It’s the distributing equivalent of CSPX. They’re both offered by iShares, having all the same characteristics, with the only difference being that IUSA pays dividends to shareholders.

Same as CSPX, its TER is 0.07%.

The funds currently holds $12b worth of assets and it’s also one of the ETFs that’s commonly held by European investors.

VUSA

Ticker symbols: VUSA, VUSD

VUSA (Vanguard S&P 500 UCITS ETF) is almost the same as IUSA, but this ETF is offered by Vanguard.

They have exactly the same characteristics: both track the S&P 500, have 0.07% expense ratio, and pay out dividends.

The only differences are that VUSA is a larger fund (manages $27b worth of assets) and does full replication of the S&P 500. IUSA does optimized sampling of the index, which means that the performance of VUSA is closer to that of the S&P 500. This is a minor difference so please don’t feel like you’ve made a “mistake” if you already hold IUSA.

As can be seen by the total assets, VUSA is the preferred option for many investors.

CSPX vs VUSA/IUSA

All three ETFs are very similar to each other. So there’s no surprise why many investors are unsure which one to pick.

The main difference between them is their distribution policy:

CSPX reinvests the dividend income in the fund
VUSA and IUSA are paying out the dividends to shareholders

This means that the amount of expenses you’d have depends on the dividend tax treatment in your country. However, rather than leaving it at “it depends”, I’d like to give an actual answer.

I actually have a strong preference for one of these ETFs before the others, even if we assume that dividends aren’t taxed at all.

MonkWealth’s Choice: CSPX

Why do I choose CSPX, although these ETFs have the same expense ratio and we assume there are no extra costs?

It’s simple: I prefer accumulating to distributing ETFs.

Of course, it boils down to preference, but my opinion is that every investor should prefer accumulating funds to distributing funds.

Let me explain why you should as well.

Why?

Since you’re comparing CSPX vs VUSA, you’re probably still in the “accumulation phase” (you’re investing, rather than living off of your investments). Also, you’re analyzing S&P 500 funds, which means you’re into index investing.

These statements bring us to the conclusion that you’re looking for a long-term vehicle to park your extra money.

Given that assumption, why would you like the fund to take out a part of its value in order to give you more cash every quarter?

Cash is what you’re trying to get rid of in the first place – that’s why you’re becoming an investor.

There are only two things that you could do with some extra money every quarter: