Best S&P 500 Index Funds 2025: Compare VOO, IVV, SPY & Tax Guide

There’s a reason investors keep returning to the S&P 500. It’s the index that has powered countless retirement accounts and inspired Warren Buffett’s famously simple advice.

S&P 500 annualized return (last 10 years): 12.4% (as of Dec 2024) ·
Number of companies in S&P 500: 500 ·
Average expense ratio for S&P 500 index funds: 0.03%–0.10% ·
Largest S&P 500 index fund by AUM: VOO ($1.2T+) ·
Top 5 holdings weight in S&P 500: ~28% (Apple, Microsoft, Nvidia, Amazon, Meta)

What are the best S&P 500 index funds?

iShares Core S&P 500 UCITS ETF (CSPX)

• Total Expense Ratio: 0.07% p.a.
• Ireland-domiciled, accumulating, UCITS-compliant
• 1-year return as of early 2025: +24.42%; 5-year return: +89.31%

Vanguard S&P 500 UCITS ETF (VUSA)

• Total Expense Ratio: 0.07% p.a.
• Ireland-domiciled, distributing, UCITS-compliant

US-listed alternatives (VOO, IVV, SPY)

• VOO expense ratio 0.03%, IVV 0.03%, SPY 0.09%
• Not UCITS, may trigger US estate tax for non-US investors

The pattern: Irish investors get the best tax treatment with UCITS-compliant ETFs like CSPX and VUSA, while US investors can use the ultra-low-cost VOO or IVV.

Can I invest in the S&P 500 from Ireland?

Yes, but the tax rules are different. Irish residents are subject to a 41% exit tax on ETF gains, including deemed disposal every 8 years, as confirmed by The Irish Times and Revenue Ireland.

Irish-domiciled ETFs vs US ETFs

• Irish-domiciled UCITS ETFs (e.g., CSPX, VUSA) are exempt from Irish estate tax and are treated under the 41% exit tax regime
• US-domiciled ETFs (e.g., VOO) may trigger US estate tax for Irish investors and are not UCITS

Tax treatment for Irish residents

• Exit tax of 41% applies to gains on disposal of ETFs
• Deemed disposal every 8 years: you must pay tax on unrealised gains as if you sold the ETF
• Capital gains tax (33%) applies to direct stock holdings, not ETFs

Recommended brokers for Irish investors

• Degiro, Interactive Brokers, and Trading 212 offer access to UCITS ETFs

The implication: Irish investors should use Ireland-domiciled UCITS ETFs to avoid double taxation and simplify reporting.

Is a S&P 500 index fund a good investment?

Historical performance supports the case. The S&P 500 has returned roughly 10% annually before inflation since its inception, according to S&P Dow Jones Indices. After inflation, the real return is about 7% per year.

Historical performance of CSPX

• 2024 return: +32.62%
• 2022 return: -13.30%
• 5-year cumulative return: +89.31%

Diversification benefit

Holding 500 large US companies reduces individual stock risk. The top 5 holdings (Apple, Microsoft, Nvidia, Amazon, Meta) make up about 28% of the index, so concentration is still a factor.

Why this matters: a S&P 500 index fund gives you broad US exposure with low fees, but you need to accept the volatility of a single-country equity portfolio.

What S&P 500 does Warren Buffett recommend?

“My advice to the trustee could not be more simple: Put 90% of the money in a very low-cost S&P 500 index fund.”

Warren Buffett, 2013 letter to Berkshire Hathaway shareholders

Buffett has consistently recommended the Vanguard S&P 500 index fund (VOO) for most investors. His 90/10 portfolio—90% in a S&P 500 index fund, 10% in short-term government bonds—is a famous blueprint for passive investing.

The trade-off: Buffett’s advice works best for US investors with a long horizon. Non-US investors need to factor in tax rules and currency risk.

Do you pay tax on S&P 500 in Ireland?

Yes. The Revenue Ireland guidance confirms that ETFs are subject to a 41% exit tax. This applies to both capital gains and dividend income inside the fund. The deemed disposal rule means you pay tax every 8 years even if you haven’t sold.

Exit tax rules

• 41% flat rate on gains
• Deemed disposal every 8 years
• No personal allowance against ETF gains

Capital gains vs income tax

• Direct stock holdings: 33% capital gains tax, no deemed disposal
• ETFs: 41% exit tax, deemed disposal applies

Double taxation treaties

Ireland has a tax treaty with the US, but US-domiciled ETFs may still be subject to US estate tax for Irish residents. UCITS ETFs avoid this because they are domiciled in Ireland.

The catch: even with the tax hit, a S&P 500 index fund can still be a competitive option when compared to higher-cost funds or inferior performance.

Is it better to invest in S&P 500 or FTSE 100?

The S&P 500 has outperformed the FTSE 100 by a wide margin over the last decade, largely due to the tech sector’s dominance. The S&P 500 is 32% technology, while the FTSE 100 is heavy in financials and energy. The FTSE 100 offers a higher dividend yield (~3.5%) compared to the S&P 500 (~1.5%).

Comparison table

Three funds, one pattern: the Irish-domiciled UCITS ETFs offer the best tax treatment for residents, while the US-listed funds have lower fees but higher tax risk.

The implication: for Irish investors, the extra 0.04% in fees is worth it to avoid US estate tax risk.

Clarity section

Confirmed facts

• S&P 500 index funds have historically returned ~10% annually before inflation
• VOO, IVV, SPY, CSPX, and VUSA are the largest and cheapest S&P 500 ETFs
• Irish investors face 41% exit tax on ETF gains
• Deemed disposal applies every 8 years

What’s unclear

• Whether S&P 500 will outperform international markets in the next decade
• Future tax policy changes in Ireland or the US

Quotes

“Put 90% of the money in a very low-cost S&P 500 index fund.”

Warren Buffett, Berkshire Hathaway chairman

“The S&P 500 is widely regarded as the best single gauge of large-cap U.S. equities.”

S&P Dow Jones Indices, factsheet

“Irish-domiciled ETFs are subject to exit tax rather than capital gains tax.”

The Irish Times

Summary: The S&P 500 index fund remains a powerful building block for any portfolio, but the tax treatment for Irish investors changes the math. The best choice: use an Ireland-domiciled UCITS ETF like CSPX or VUSA, accept the 41% exit tax, and enjoy the low-cost, diversified exposure to the US market. For US investors, sticking with VOO or IVV is the simplest path. For Irish investors, the decision is clear: choose a UCITS-compliant fund, or risk paying more in taxes than you save in fees.

Related reading: **S&P 500-terminer – Guide till priser, handel och strategi** · **Precinct Properties Share Price: Latest Data & Dividends**

For those new to passive investing, our in-depth guide explains the fundamentals of how these funds work and why they are a popular choice.

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