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Best S&P 500 ETFs on the ASX

S&P 500 ETFs give Australian investors access to the 500 largest US companies, representing approximately 80% of the US equity market and roughly 60% of global market capitalisation. The S&P 500 has been the world's best-performing major index over the past decade.

5
ETFs tracked
0.03%
Lowest MER
+15.2%
Best 1Y return
$23,980.5M
Total AUM
IVV
Top pick
Fees (MER) - Lower is better
VTS
0.03%IVV
0.04%USX
0.07%SPY
0.09%IHVV
0.10%
1-Year Returns
USX
+15.2%IHVV
+14.7%SPY
+8.0%VTS
+5.3%IVV
+5.1%

All S&P 500 ETFs

sorted by Score · highest firstclick any column to sort
ETF Name Score MER 1Y Return 3Y Return Yield AUM ($M)
IVViShares S&P 500 ETF890.04%+5.1%+17.3%1.09%12,543.7
IHVViShares S&P 500 (AUD Hedged) ETF730.10%+14.7%+16.9%0.79%3,306.8
USXBetaShares S&P 500 Equal Weight ETF730.07%+15.2%-1.32%680
VTSVanguard US Total Market Shares Index ETF610.03%+5.3%+17.1%-5,600
SPYSPDR S&P 500 ETF Trust490.09%+8.0%+16.8%-1,850

Overview

S&P 500 ETFs give Australian investors access to the 500 largest US companies, representing approximately 80% of the US equity market and roughly 60% of global market capitalisation. The S&P 500 has been the world's best-performing major index over the past decade.

What to look for

The main decisions are: which index (S&P 500 vs total US market), hedged or unhedged, and which provider. IVV (0.04%) and VTS (0.03%) are the cheapest options but track different indexes. IVV holds 500 large-caps while VTS holds ~3,500 companies across all market caps. IHVV adds currency hedging for those who want to remove AUD/USD volatility.

Considerations

Unhedged US ETFs benefit when the AUD falls against the USD, which has been the general trend over the past decade. However, a strengthening AUD would reduce returns. Currency hedging (IHVV) removes this variable but adds cost. Most long-term investors prefer unhedged exposure for the diversification benefit. Note that VTS is US-domiciled, which means no DRP and a W-8BEN form is required.

Compare S&P 500 ETFs

IVVvsVGS
US vs Global equity exposure
IVVvsIHVV
S&P 500 hedged vs unhedged
IVVvsSPY
iShares vs SPDR S&P 500

Frequently Asked Questions

What is an S&P 500 ETF?+

An S&P 500 ETF tracks the 500 largest US-listed companies by market capitalisation, covering approximately 80% of total US equity market value across sectors including technology, healthcare, financials, and consumer discretionary. On the ASX, key options include IVV (iShares, unhedged), SPY (SPDR, US-domiciled but ASX-quoted via CHESS), and IHVV (iShares, AUD-hedged). Top holdings include Apple, Microsoft, NVIDIA, Amazon, and Meta, with the top 10 stocks comprising roughly 35% of the index due to market-cap weighting.

What should investors look for when choosing an S&P 500 ETF on the ASX?+

The critical choice is AUD-hedged (IHVV) versus unhedged (IVV) - unhedged means your returns fluctuate with the AUD/USD exchange rate, which can amplify or reduce gains significantly. Compare management fees (IVV at 0.04% p.a. is among the cheapest ETFs on ASX), and check the fund's domicile for tax implications - US-domiciled funds like SPY may involve W-8BEN forms and US withholding tax complexities. For most long-term Australian investors, unhedged exposure provides natural currency diversification, but short-term investors may prefer hedged to isolate pure equity returns.

How does USD currency exposure affect my S&P 500 ETF returns in Australia?+

When you hold an unhedged S&P 500 ETF like IVV on ASX, you're making two bets: one on US equities and one on the AUD/USD exchange rate. If the Australian dollar falls (e.g., from $0.70 to $0.65 USD), your returns get a boost when converted back to AUD - conversely, a rising AUD erodes returns. Historically, the AUD tends to fall during global crises when US equities also drop, providing a partial natural hedge, which is why many Australian financial planners recommend unhedged US exposure for long-term portfolios.

What are the risks of S&P 500 ETFs and who are they suited for?+

Key risks include heavy concentration in US mega-cap tech - the 'Magnificent Seven' stocks dominate performance, meaning a tech sector rotation can drag the entire index sharply lower, as seen in 2022's ~20% drawdown. S&P 500 ETFs pay unfranked dividends to Australian investors, and US withholding tax of 15% applies (reduced from 30% via the US-Australia tax treaty with a W-8BEN). These ETFs suit Australian investors seeking core US large-cap exposure as a complement to ASX holdings, particularly growth-oriented investors with a 7+ year time horizon.

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