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

SPYL is State Street Global Advisors' S&P 500 ETF. As an Ireland domiciled, accumulating fund with an industry-leading 0.03% TER, it is an excellent option available to Indian investors looking for US market exposure.

VUAA is Vanguard's S&P 500 ETF. It offers S&P 500 exposure, a 0.07% Total Expense Ratio, and an accumulating structure, quickly growing to over €26 billion in assets since its 2019 launch.

Indian investors are often confused between these two because they have similar underlying assets and track the exact same index. Here is how and where they differ, and which one makes more sense for Indian investors.

Table of contents

• What SPYL and VUAA Have in Common
• Where They Differ
  • Provider and Fund Size
  • Costs and Tracking
• Which Should Indian Investors Buy?
• Already Holding One? Should You Switch?
• About Paasa
• FAQs

What SPYL and VUAA Have in Common

• Both track the exact same index, giving you exposure to similar underlying assets of the 500 largest US companies.
• Both share the exact same structure and domicile. VUAA and SPYL are both Ireland domiciled, accumulating funds, meaning they share the exact same tax-efficient foundation despite their different providers.
• Both are structured to provide Indian investors with global market exposure while eliminating the 40% US estate tax risk.
• Both automatically reinvest dividends without creating an annual taxable event for the investor.
• Both can be accessed seamlessly via global investing platforms like Paasa.

Where They Differ

Provider and Fund Size

VUAA is managed by Vanguard, a pioneer in index investing, and has grown its Assets Under Management to over €26 billion since its launch in 2019. In comparison, SPYL is managed by State Street Global Advisors (SSGA), with an AUM of roughly €4 billion since it launched in late 2023.

Costs and Tracking

For VUAA, investors pay a Total Expense Ratio of 0.07%, while the fund maintains a tracking difference of -0.05%. SPYL operates with a highly competitive TER of 0.03% and a negligible tracking difference. These specific metrics directly impact the long-term compounding of your invested capital.

Which Should Indian Investors Buy?

Choosing the right ETF depends entirely on the specific metrics you prioritize. VUAA is an excellent choice for investors who want a large, established fund with a proven track record, substantial liquidity, and the Vanguard provider philosophy.

On the other hand, SPYL may appeal to those looking for the specific features offered by State Street Global Advisors, depending on how its low 0.03% TER and rapidly growing AUM fit into your broader long-term strategy.

Ultimately, do not overthink it. Both vehicles provide Indian investors with straightforward access to global markets, and picking either one puts you on the right path.

Already Holding One? Should You Switch?

If you already hold VUAA, selling it to switch to SPYL will trigger a capital gains tax event in India. You will be subject to Short-Term Capital Gains tax if you have held the ETF for less than 24 months, or Long-Term Capital Gains tax at 12.5% if held longer.

The minor mathematical advantages you might gain from any differences in the Total Expense Ratio are often canceled out by the taxes and brokerage fees incurred during the switch. For most investors, the most efficient approach is to leave your existing holdings untouched and direct all your future capital into your newly preferred ETF.

Building your portfolio with global ETFs remains the single most tax-efficient way for Indian investors to compound wealth internationally. You can explore platforms like Paasa 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. 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.