6J·

Swap S&P 500 ETF?

Hello everyone,

I currently have the $CSPX (-1,14 %) in my portfolio and I'm thinking about switching to the $SPYL (-0,72 %) as the TER is more favorable. I could still do this without tax expenses as I am still at the beginning and there is still a lot of room for maneuver in the tax-free amount.

Is there anything I am overlooking that justifies staying in the $CSPX (-1,14 %) other than the fund volume? Of course, the lower TER doesn't make much difference at the moment, but it could save a few euros in the future.

Ps I have a monthly savings plan on S&P 500.

4 Commentaires

Hebel-Horst@DoppelSchlechtMinus

The performance since inception after fees hardly differs. I wouldn't worry about the second decimal place of the TER. It is also possible that the others will soon follow suit in the price war.

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VP@VPT

Have you taken a look at the corresponding tracking difference (TD)?

Without knowing the $SPYL exactly, it is still quite new (edition 31.10.23) and there is probably no reported TD yet ...I can already make the following comment on $CSPX:

- TER: is 0.07 %
- Tracking difference: is -0.21 %

This means:
- The TER is deducted from the fund assets, but the ETF still achieves a better net performance than the index.
- The actual return of the ETF is 0.21% above the benchmark, although the TER is 0.07%.

The ETF may generate additional income that more than offsets the costs. This can be due to various factors, e.g:

- Income from securities lending
- Efficient tax structure (e.g. better withholding tax refund)
- Optimized rebalancing and low trading costs
- Skillful management by iShares

What does this mean in concrete terms?
- Costs (TER): 0.07 %
- Outperformance (tracking difference): +0.21 %

This means that you get 0.21% more return than the index, although the ETF has a TER of 0.07%. The net profit (the actual difference after deduction of costs) would therefore be
0.21 % (outperformance) - 0.07 % (TER) = 0.14 %

The $CSPX not only offsets the costs of 0.07%, but also achieves a consistently positive tracking difference, and this has been the case since its launch in 2011.
This could be the advantage of the large fund company iShares.

As I said, your banned is still too young to judge the topic. For me, the small TER difference would not be decisive and I would rely on the established product.

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JoeyTribbianiJr@JoeyTribbianiJr

@VPT thanks for the detailed explanation, I actually read about TD but couldn't make sense of the number

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DerMartin@DerMartin

@VPT Top rated.

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