VUAG vs VUSA: Which S&P 500 ETF Is Right for You?

Choosing between VUAG and VUSA for your S&P 500 investment? While both ETFs track the same index, their key differences in dividend handling and tax implications can significantly impact your returns. Let's dive into a detailed comparison to help you make an informed decision.

VUAG vs VUSA: Key Features Comparison

Key Differences Explained

1. Dividend Treatment

The primary distinction between these ETFs lies in how they handle dividends:

• VUAG (Accumulating): Automatically reinvests dividends back into the fund, potentially offering better compound growth and tax efficiency
• VUSA (Distributing): Pays out quarterly dividends to investors, ideal for those seeking regular income

2. Performance Characteristics

Both ETFs deliver nearly identical exposure to the S&P 500, but their total return patterns differ due to dividend handling:

• VUAG: Shows higher price appreciation due to dividend reinvestment
• VUSA: Lower price appreciation but provides regular income through distributions

3. Tax Implications

Both ETFs benefit from Ireland's tax treaty with the US, resulting in:

• 15% dividend withholding tax (versus 30% for US-domiciled ETFs)
• Different tax treatment for investors depending on their jurisdiction:
  • VUAG: Potentially more tax-efficient for long-term investors
  • VUSA: May require more active tax management due to regular distributions

Investment Accessibility

Trading Venues

Both ETFs are widely available across major European exchanges:

Top Holdings

Which ETF Should You Choose?

Consider VUAG if you:

• Want a hands-off, long-term investment approach
• Prefer automatic dividend reinvestment
• Seek potential tax advantages through accumulation

Consider VUSA if you:

• Need regular income from your investments
• Prefer to manage dividend reinvestment yourself
• Want access to a more established fund with higher liquidity

How to Invest

Several reputable brokers offer access to both ETFs:

1. Interactive Brokers
   • Largest ETF selection
   • Competitive fees (from 0.0035 USD per share)
   • No minimum deposit

1. Trading 212
   • Commission-free trading
   • User-friendly platform
   • €/£0 minimum deposit

Find the best broker for your needs with our Broker Matching Tool

Final Thoughts

Both VUAG and VUSA offer efficient exposure to the S&P 500 index with minimal costs. Your choice should ultimately depend on your investment goals, tax situation, and income requirements. For long-term wealth building, VUAG's accumulating structure might be more advantageous, while VUSA could better suit investors seeking regular income.