CSPX vs SPYL: Which UCITS ETF Should Indian Investors Buy?

CSPX is BlackRock's iShares Core S&P 500 UCITS ETF. As an Ireland-domiciled, accumulating fund with over $100 billion in assets, it is a definitive benchmark for international investors requiring core US large-cap equity exposure.

SPYL is State Street Global Advisors' answer to the exact same index. It offers identical S&P 500 exposure and the same accumulating structure, but aggressively captures market share with an ultra-low 0.03% Total Expense Ratio, amassing roughly $11.5 billion in assets since its launch in late 2023.

International and European investors are often confused between these two because they track the exact same underlying assets and share identical tax advantages. Here is how and where they differ, and which one makes more sense for your long-term portfolio allocation.

Table of contents

• What CSPX and SPYL Have in Common
• Where They Differ
  • Fund Size, History, and Liquidity
  • Total Expense Ratio (TER)
  • Tracking Difference and Execution
• Which Should Indian Investors Buy?
• Already Holding One? Should You Switch?
• About Paasa

What CSPX and SPYL Have in Common

• Both track the exact same 503 constituents of the S&P 500, heavily weighted toward Information Technology and the "Magnificent Seven" stocks.
• Both use full physical replication, meaning they hold the actual underlying stocks rather than using synthetic derivatives.
• Both are Ireland-domiciled. This eliminates the 40% US estate tax risk for Indian investors and leverages the US-Ireland tax treaty to reduce dividend withholding tax from 30% to 15%.
• Both are accumulating funds. Dividends are automatically reinvested internally, deferring taxable events and eliminating cash drag to optimize long-term compound growth.
• Both share the exact same Indian tax treatment: Short-Term Capital Gains (STCG) at your applicable slab rate if sold within 24 months, and Long-Term Capital Gains (LTCG) at 12.5% if held longer.

Where They Differ

Fund Size, History, and Liquidity

CSPX launched in May 2010 and operates with massive institutional scale. Holding over $100 billion in standalone assets, it is one of the largest and most liquid UCITS ETFs globally. This deep liquidity ensures tight bid-ask spreads, making it exceptionally easy to enter and exit large positions without moving the market.

SPYL is a much newer offering. The accumulating share class officially launched on 31 October 2023. While the fund boasts $11.5 billion in assets, this figure represents the combined Assets Under Management across the entire SPDR S&P 500 UCITS ETF family, which includes an older distributing share class. The standalone SPYL accumulating class holds between $3 billion and $5 billion. It is highly liquid, but it does not yet match the sheer historical trading volume of CSPX.

Total Expense Ratio (TER)

The most obvious difference between the two is the cost. State Street leveraged its massive scale to undercut European market competitors, pricing SPYL at an ultra-low 0.03% TER. This makes SPYL one of the absolute cheapest S&P 500 UCITS ETFs available. BlackRock operates CSPX with a slightly higher, but still highly competitive, TER of 0.07%.

Tracking Difference and Execution

For seasoned investors, tracking difference is often more important than the headline TER because it represents what you actually lose versus the index. CSPX boasts an incredibly precise historical tracking difference of +/- 0.05%. Through highly efficient portfolio management and active securities lending revenue, CSPX occasionally covers its own fees entirely.

Because SPYL launched in late 2023, multi-year tracking data is still accumulating. However, given State Street's physical replication methodology and the extremely low 3 basis point management fee, structural drag on performance is expected to remain minimal.

Which Should Indian Investors Buy?

For Indian investors seeking core US equity exposure, both funds are top-tier choices, but they serve slightly different priorities. CSPX is the definitive benchmark if you prioritize a decade-long track record, proven tracking efficiency, and the tightest possible bid-ask spreads for executing large trades.

You should pick SPYL if you are highly fee-conscious and want a "set-and-forget" holding with the absolute lowest overhead cost available. At just 0.03%, State Street offers an institutional-grade S&P 500 tracker that maximizes cost efficiency for long-term buy-and-hold investors.

Ultimately, picking either ETF puts your portfolio on an excellent path. Both capture the exact same US market returns, offer identical tax advantages through their Irish domicile, and remove the friction of manual dividend management.

Already Holding One? Should You Switch?

If you already hold CSPX in your portfolio, do not sell your shares just to capture the lower 0.03% fee of SPYL. Selling your shares will immediately trigger a capital gains tax event in India. If you have held the ETF for less than 24 months, you will owe STCG at your standard slab rate. If you have held it for more than 24 months, you will owe LTCG at 12.5%.

The tiny 0.04% annual fee savings you gain by switching to SPYL will be completely erased by the taxes and brokerage fees incurred during the sale. If you want to transition to State Street's lower-cost offering, simply keep your existing CSPX shares untouched and direct all future capital allocations into SPYL.

Building your portfolio with Ireland-domiciled UCITS ETFs is the single most tax-efficient way for Indian investors to access global markets. You can read our complete LRS guide to learn how to fund your global account seamlessly.

About Paasa

Paasa is a global investing platform built specifically for Indian residents and returning NRIs. We bridge the gap between complex global brokerages and the specific, everyday needs of Indian investors.

• Estate Tax Protection: Paasa gives you direct access to Ireland-domiciled (UCITS) ETFs, including CSPX and SPYL. This allows you to legally shield your long-term wealth from the 40% US Estate Tax.
• Seamless Funding & LRS: We handle the LRS compliance process and secure competitive FX rates, ensuring your capital reaches the global markets efficiently.
• The Compliance Advantage: We generate ready-made capital gains and Schedule FA tax reports tailored for the Indian tax system, so you can focus entirely on growing your portfolio instead of managing spreadsheets.