The legendary investor Warren Buffet has long recommended that the average person buy a low cost S&P500 index fund, as it will be difficult to beat the market in long run. Being an average Joe in the market and having more time currently to learn, I decided to take a closer look at the S&P500 passive ETFs.
USA remains the largest economy in the world, and the Top500 companies make up the S&P500 index. I have travelled many times to different parts of USA and have always loved this country, which is full of natural resources, freedom & innovation. Though in recent years, challenges (eg. dysfunctional politics and gun violence) have arised, I still believe that USA will be the market leader for many more years to come.
Naturally while looking at the S&P500 ETF, one will first see the oldest (since 1993) and most liquid SPY.
The slight con of SPY is its relatively higher Expense Ratio at 0.09% as compared to 0.03% in BlackRock IVV, Vanguard VOO and also State Street's cousin SPLG
Since I am thinking of using my current Standard Chartered trading platform, I am considering IVV which is priced around $414. I also like this price as it's almost 10 times less than the current 4140 S&P500 index. Easy to calculate mah ... 😂
As I am new to investing in S&P500 index, please let me know if u have any better passive Index Funds suggestions. Thanks :)
Buy the Irish-Domiciled one so you pay less tax on the dividend
ReplyDeleteThanks KC. Understand that getting the Irish domicile ETF will save about 15% tax (15% instead of 30%) on dividends. As I already have a USD account with Standard Chartered bank, it will be easier to deal in USD. Having an Irish domicile ETF would mean I have to deal with EUR and manage another currency risk. Thanks for your suggestion :)
DeleteNot really. Irish domiciled ETFs can be USD denominated. Eg CSPX
DeleteThanks JDH. The dividends of CSPX are accumulating vs dividends of IVV are distributing. It's nice to have some money back ... haha :)
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