Best S&P 500 ETFs for Singapore investors (2026): A complete guide

What happened?

The US stock market has continued to attract investors globally as it remains home to many of the world's largest and most innovative companies. 

The S&P 500 index tracks the 500 largest companies in the US and it is one of the world's most popular stock market indices for investors seeking exposure to the growth of the US stock market.

Components of the S&P 500 include prominent names like Apple, NVIDIA, Amazon, Alphabet (Google), Berkshire Hathaway, Walmart, and more.

These are some of the largest multinational companies in the world.

For Singapore investors, investing in an S&P 500 ETF is one of the simplest ways to own shares in 500 of the largest listed companies in the United States through a single investment.

However, there are now many S&P 500 ETFs to choose from. While they all track the same index, they differ in important ways, including where they are listed, fund fees, dividend treatment, liquidity, and tax efficiency.

In this guide, we'll compare some of the most popular S&P 500 ETFs available to Singapore investors and explain how to choose the one that best suits your needs.

What is the S&P 500? 

The S&P 500 index is a market-capitalisation-weighted index that measures the performance of the 500 largest US listed companies.

Being market-capitalisation-weighted means that larger companies will occupy a larger weightage in the index.

You may already be familiar with many of the companies in the S&P 500, which include global names such as NVIDIA, Apple, Amazon and Alphabet (Google). 

But the index is not just made up of large technology companies, as it also includes leading businesses from many other parts of the US economy. 

These stocks cover a wide range of industries, including technology, healthcare, finance, consumer goods, and so on.

The S&P 500 serves as an important benchmark as it represents approximately 80% of the total US stock market’s market capitalisation and is typically seen as the bellwether for global economic health.

It also has global appeal because of its broad exposure that offers diversification with 500 companies across various sectors. These stocks are usually well-established companies that are global leaders in their own fields.

Therefore, the S&P 500 index offers investors the ability to invest in high quality and global companies with a track record of growing their businesses over time.

Why invest in an S&P 500 ETF?

To invest in the S&P 500, the easiest way is to buy shares or units of ETFs which passively track the index. This is one of the most common ways global investors gain exposure to this index. To find out more about ETF investing, read our Beginner guide to ETF investing: How to choose your first ETF.

#1 - Diversification across 500 leading US companies

Instead of buying shares of individual companies, buying an S&P 500 ETFs gives you instant diversification across 500 of the largest US listed companies.

Diversification helps reduce the impact that any single company's poor performance can have on your overall portfolio.

If one company experiences weaker earnings or faces unexpected challenges, it is less likely to significantly affect the overall value of your investment. 

Besides that, the S&P 500 is not a static index. As companies grow, decline or no longer meet the index's eligibility criteria, its constituents are periodically reviewed and updated.

This means investors automatically gain exposure to businesses that become more significant in the US economy while companies that become less relevant may eventually be removed.

For example, companies such as Nvidia have grown to become some of the largest constituents of the index over time as their market value increased.

Investors in S&P 500 ETFs benefited from this growth without needing to actively adjust their portfolios.

#2 - Low costs

One of the biggest advantages of ETF investing is its relatively low cost.

Because S&P 500 ETFs simply aim to replicate the performance of an index rather than relying on fund managers to actively select stocks, their operating costs are generally much lower than those of actively managed funds.

Many S&P 500 ETFs now charge annual expense ratios of less than 0.10%, allowing investors to keep more of their investment returns over time.

Lower costs can have a meaningful impact on long-term wealth due to the effects of compounding. This cost-efficiency allows investors to keep investment costs low, grow more of their investment returns and compound their wealth over time.

#3 - Participate in the long-term growth of the US economy

The United States is home to many of the world's largest and most influential companies. Many of these businesses generate substantial revenues from customers around the world rather than relying solely on the US domestic market.

As these companies innovate, expand into new markets and grow their earnings over time, investors can participate in that growth through an S&P 500 ETF.

Historically, the S&P 500 has delivered attractive long-term returns despite periods of market volatility. While past performance does not guarantee future returns, the index has rewarded investors who remained invested through different economic cycles.

#4 - A simple way to invest without picking individual stocks

Choosing individual stocks requires significant research and ongoing monitoring.

An S&P 500 ETF removes much of this complexity.

Instead of trying to identify tomorrow's winners, investors simply own the market through a diversified portfolio. This makes it an attractive option for beginners as well as experienced investors who prefer a more passive investment approach.

What are the ETFs that track the S&P 500?

There are dozens of ETFs that track the S&P 500, giving investors several ways to gain exposure to the same underlying index. 

However, these ETFs may differ in where they are listed, their fund domicile and whether dividends are distributed or automatically reinvested. 

For Singapore investors, these structural differences can be important as they affect which market we need access to, how dividends are received and the potential tax implications.

Where are the S&P 500 ETFs listed?

For example, SPDR S&P 500 ETF Trust (SGX: S27) is traded on the SGX, which may be more familiar to Singapore investors, although the ETF itself is still domiciled in the US.

Meanwhile, SPDR S&P 500 UCITS ETF (SPYL), iShares Core S&P 500 UCITS ETF (CSPX) and Vanguard S&P 500 UCITS ETF (VUSD) are Ireland-domiciled ETFs listed on the London Stock Exchange. 

SPYL and CSPX are accumulating ETFs that automatically reinvest dividends, while VUSD distributes its dividends.

Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF Trust (SPY) and iShares Core S&P 500 ETF (IVV) are US-listed and US-domiciled ETFs.

How do their costs and fund sizes compare?

Costs are relatively low across all the S&P 500 ETFs in our comparison, although there are still differences. 

SPDR S&P 500 UCITS ETF (SPYL), Vanguard S&P 500 ETF (VOO) and iShares Core S&P 500 ETF (IVV) have the lowest expense ratio at 0.03%, while SPDR S&P 500 ETF Trust (SGX: S27) and SPDR S&P 500 ETF Trust (SPY) have the highest at 0.0945%.

Fund sizes also vary significantly. However, rather than looking at fund size or fees alone, I would also consider factors such as domicile, dividend treatment, tax implications and the exchange on which the ETF is traded.

Here is a summary table showing quick facts about a few of the most popular S&P 500 ETFs.

What are the factors to consider when investing in S&P 500 ETFs?

While S&P 500 ETFs all aim to track the same underlying index, they are not necessarily identical from an investor's perspective.

Factors such as the ETF's domicile, fees, dividend treatment, and fund size can affect the long-term returns and tax implications.

#1 - ETF domicile

One of the most important factors for Singapore investors is where the ETF is domiciled.

An ETF's domicile refers to the country where the fund is legally registered. Popular S&P 500 ETFs are either domiciled in the US or Ireland.

For example S27, VOO, SPY, and IVV are US-domiciled ETFs while SPYL, CSPX, and VUSD are Ireland-domiciled ETFs.

For investors, this is important because it impacts the taxes we pay on the distributions or during estate planning.

For example, US listed S&P 500 ETFs incur withholding tax of 30% on distributions, while the Irish domiciled ones incur only 15%.

US domiciled ETFs also incur up to 40% estate tax on amounts above US$60,000. This will impact estate planning in the scenario where we pass on. However, non-US domiciled ETFs do not incur estate taxes.

#2 - Expense ratio

The expense ratio is the annual fee charged by an ETF to operate the fund. It is deducted from the fund's assets rather than being charged separately to investors.

Because S&P 500 ETFs track the same index, the lower the expense ratio the better as more of our money can work into compounding for us.

Generally, investing in S&P 500 ETFs is low cost, mainly because they are passive in nature and simply track the index without active fund management trying to outperform.

This helps make investing in S&P 500 ETFs among the lowest cost options available for ETF investors.

#3 - Accumulating vs distributing 

We should also consider whether we want the dividends to be automatically reinvested or paid out into our accounts. 

An accumulating ETF automatically reinvests dividends back into the fund. This means we do not receive cash dividends paid out into our accounts.

A distributing ETF, on the other hand, pays out dividends as cash.

Someone building wealth over a long period may prefer an accumulating ETF because dividend reinvestment happens automatically while someone who wants to receive regular cash distributions may prefer a distributing ETF.

#4 - Fund size and liquidity

An ETF with a larger fund size and higher trading volume may be easier to buy and sell.

It is also useful to check the bid-ask spread.

The bid price is what buyers are willing to pay, while the ask price is what sellers are asking for.

A wider spread can increase trading cost, especially for investors who buy and sell frequently.

How do the S&P 500 ETFs compare against each other

The SPDR S&P 500 ETF Trust (S27) is the only S&P 500 ETF that is traded on the Singapore Exchange (SGX). It is also the oldest S&P 500 ETF but it has the highest expense ratio in the list at 0.0945%. 

Even though it is traded on the SGX, it is important to remember that it is still domiciled in the US and so US taxation still applies.

The Vanguard S&P 500 ETF (VOO) is currently the largest and most liquid S&P 500 ETF in the world with one of the lowest expense ratios. It is also a US-domiciled ETF. 

For investors who prefer an Ireland-domiciled ETF, the iShares Core S&P 500 UCITS ETF (CSPX) is a popular choice for long term investors with an expense ratio of 0.07% and an accumulating dividend class.

A recently launched alternative to CSPX is the SPDR S&P 500 UCITS ETF (SPYL) which has the lowest expense ratio among the Ireland-domiciled ETFs of just 0.03%. However, it has a shorter track record and smaller fund size compared to its peers.

Risks of investing in S&P 500 ETFs

An S&P 500 ETF provides exposure to hundreds of large US companies, but this diversification does not mean it is risk-free.

Before investing, it is worth understanding several key risks.

#1 - Market risk

S&P 500 ETFs are ultimately equity ETFs which makes them exposed to market risk.

The index can experience significant declines and heightened volatility during economic recessions or financial crises.

For example, during the global financial crisis, the COVID-19 pandemic, and other periods of economic and market uncertainty, the S&P 500 index saw significant declines.

While it has historically recovered and went on to continue growing, there is no guarantee that it will always recover within a particular timeframe. 

If we were forced to sell our investments during the correction, there is a risk of realizing capital losses.

#2 - Concentration risk

Although the S&P 500 contains 500 companies, it is not an equally weighted index.

The index is weighted according to market capitalisation, meaning the largest companies make up a much larger proportion of the portfolio.

This has become increasingly important as several mega-cap technology companies have grown substantially in value.

For example, the top 10 holdings of the SPDR S&P 500 ETF Trust (SGX: S27) accounts for over 36% of the ETF, with over 38% of the ETF concentrated in the Information Technology sector.

If several of the largest companies experience a sharp decline at the same time, the impact on the overall index can be significant.

#3 - Currency risk

Singapore investors buying US equity ETFs are exposed to fluctuations between the US dollar and Singapore dollar.

This means returns can be affected by movements in the US$ and SG$ exchange rate.

You would also need to consider the impact of exchange rates especially when you eventually want to liquidate and convert the ETFs back into your home currency.

#4 - Dividend withholding tax and estate tax

US-domiciled ETFs generally incur a 30% withholding tax on dividends paid to Singapore investors.

Meanwhile, Ireland-domiciled ETFs have a 15% withholding tax rate on dividends.

Although the S&P 500's dividend yield is relatively modest, the difference in withholding tax can reduce the amount of income that gets reinvested over a long investment horizon.

US estate tax is another consideration for Singapore investors holding US-domiciled ETFs which may incur up to 40% estate tax on amounts above US$60,000 in the unfortunate event where we pass on. 

How can Singapore investors buy S&P 500 ETFs?

ETFs are bought and sold on the stock exchange, just like stocks.

This means that investors can place buy or sell orders through a brokerage account during market hours.

If you are buying SGX-listed ETFs, you will need a brokerage account that allows you to trade Singapore stocks and ETFs.

If you are buying US-listed or London-listed ETFs, you will need a brokerage account that provides access to those markets.

If you are looking to open a brokerage account, find out the best online brokerage and stock trading platforms to invest in the S&P 500 here.

What would Beansprout do?

If I wanted simple, long-term exposure to the US stock market, an S&P 500 ETF could form part of my Growth Pot within the Four Pots of Wealth framework.

Rather than trying to pick the next winning stock, I would focus on building diversified exposure to the world's largest companies through regular investments over time. This approach allows me to participate in the long-term growth of the US economy while reducing the risk that comes from relying on individual companies.

We remain constructive on the US market, with resilient earnings and continued AI investment supporting the outlook. However, with valuations elevated, there may be less room for disappointment if economic or earnings growth weakens. 

I would not necessarily put all my Growth Pot into the US either. We continue to see Singapore as a core portfolio holding, with its structural growth themes intact and valuations still below the 2007 peak. This is why I may consider holding both STI ETFs and S&P 500 ETFs as part of a diversified long-term portfolio. 

Before starting investments into my Growth Pot, however, I would first make sure that I have built a strong financial foundation with sufficient funds in my Liquidity Pot to cover emergencies and short-term expenses.

Once that foundation is in place, I may use dollar-cost averaging to invest regularly in broad-market index funds rather than trying to time short-term movements in the market. 

When choosing an S&P 500 ETF, I would also pay close attention to costs and tax efficiency. While the differences in expense ratios may seem small, they can compound over many years. Likewise, choosing an Ireland-domiciled ETF may help reduce dividend withholding taxes and avoid potential US estate tax considerations.

Ultimately, I would choose a low-cost ETF that fits my investment preferences and that I am comfortable holding for the long term, rather than frequently switching funds to chase small differences in fees or performance. 

Finally, I would remember that an S&P 500 ETF is just one part of a diversified portfolio.

Under our Four Pots of Wealth framework, I would balance my Growth Pot with sufficient assets in my Liquidity Pot for emergencies, while building my Income Pot over time. This helps ensure my portfolio is positioned not just for growth, but also for resilience and flexibility.

If you are looking for greater clarity on the markets and the investment decisions that matter, explore Beansprout Pro for our latest views, portfolio thinking and the reasoning behind each opportunity.

If you prefer to invest in a familiar market like Singapore, find out more about the ETFs that track the Straits Times Index (STI). 

If you prefer to invest for dividend income, find out more about the ETFs that offer exposure to Singapore REITs.

If you want to invest in an ETF that tracks the whole world instead of just the US, take a look at Vanguard FTSE All-World UCITS ETF (VWRA).

If you're new to ETFs, find out more about Exchange Traded Funds (ETFs) in Singapore here.

Which S&P 500 ETFs are you considering? Leave a comment below or share with us in the Beansprout telegram group.

Planning to invest in S&P 500 ETFs? Compare the best Singapore brokers to find the right trading platform, and see the latest promotions and sign-up rewards available.

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