Sector & Thematic Strategy Briefing - Wednesday 29th March 2023 - The Berkeley, London Please join us for our annual sector and thematic investing event, featuring DWS Xtrackers, First Trust, MSCI, Redburn and Sprott Asset Management. Please register now if you would like to attend.
US large-cap equity ETFs have recorded gains recently as the S&P 500 Index hit intraday- and closing-high records on 25 July 2017. In a week where 180 of the index’s constituents are reporting their second-quarter results, several companies have delivered better-than-expected earnings, which sent the index to 2,477.08 at the close. ETFs tracking the index, such as the $19.3bn iShares Core S&P 500 UCITS ETF (LON: CSPX), have added around 10.7% so far in 2017.

The S&P 500 and the Nasdaq 100 both recorded record closing highs on 25 July.
Among those reporting earnings were McDonald’s, whose shares rose 4.8% as the fast-food restaurant chain reported strong global sales. Caterpillar shares climbed 5.9% after the industrial machinery manufacturer raised its full-year outlook for the second time this year.
The financial and energy sectors also posted strong gains for the day. The former was boosted by a strong profit forecast from Citigroup, and the latter was helped by a sharp gain in the price of oil, up 3.3% on the day.
Not all the earnings releases were good news, however. Alphabet and 3m both saw their shares slide as results disappointed analysts. Other S&P 500 companies due to report this week include Boeing, Facebook, Amazon and Coca Cola.
There are a number of options for European investors to gain exposure to the S&P 500 index through ETFs. CSPX is the largest in Europe and has a total expense ratio (TER) of 0.07%. The cheapest European-listed fund to track the index is the Source S&P 500 UCITS ETF (Xetra: P500) which costs just 0.05% and has AUM of $2.1bn.
There are also numerous locally listed smart beta ETFs based on the S&P 500 which take an alternative approx to the market-cap weighted index. The largest is the low vol iShares Edge S&P 500 Minimum Volatility UCITS ETF (LON: SPMV), which has returned 6.4% since the start of the year and has AUM of $1.2bn with a TER of 0.20%. Another popular fund is the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF (LON: HDLV), which leans to towards low vol dividend-payers and has returned 4.2% so far this year. It has $477 million in AUM and a TER of 0.30%. Meanwhile, the db x-trackers S&P 500 Equal Weight UCITS ETF (LON: XDEW), which equally weights index constituents, has performed more favourably, though still behind the parent index, returning 9.0% since the start of 2017, and has AUM of $467m with a TER of 0.25%.
The largest S&P 500 tracker is also the largest ETF listed globally, the $240bn SPDR S&P 500 ETF Trust (NYSE Arca: SPY), which is double the size of the next largest ETF, the iShares Core S&P 500 ETF (NYSE Arca: IVV).