SPY vs VOO vs CSPX for Indian investors: which S&P 500 ETF to buy (2026)

SPY, VOO, and CSPX all track the S&P 500. They hold essentially the same 500 companies in the same weights. Over a 10-year period, their gross returns before costs are nearly identical.

But for an Indian resident, the choice between them is not trivial. The difference is not performance — it is where the fund is domiciled, and that determines: dividend withholding tax (15% vs 30%), US estate tax exposure ($0 vs potentially six figures), and which accounts you can hold them in.

The three ETFs at a glance

	SPY	VOO	CSPX
Full name	SPDR S&P 500 ETF Trust	Vanguard S&P 500 ETF	iShares Core S&P 500 UCITS ETF
Issuer	State Street	Vanguard	BlackRock (iShares)
Domicile	United States	United States	Ireland
Exchange	NYSE Arca	NYSE Arca	London Stock Exchange
Currency	USD	USD	USD (also GBP-hedged class)
Expense ratio	0.0945%/yr	0.03%/yr	0.07%/yr
AUM	~$600B	~$600B	~$60B
Dividend handling	Distributing (quarterly)	Distributing (quarterly)	Accumulating (CSPX) or Distributing (CSPS)
Dividend yield	~1.3%	~1.3%	N/A for accumulating class
US estate tax	Yes — US-situs	Yes — US-situs	No — non-US-situs

Expense ratio: VOO wins, but it barely matters

ETF	Expense ratio	Cost on ₹10 lakh/yr
SPY	0.0945%	₹945
VOO	0.03%	₹300
CSPX	0.07%	₹700

The difference between VOO (0.03%) and SPY (0.0945%) is ₹645 per year on ₹10 lakh — meaningful over decades but not the deciding factor. CSPX (0.07%) sits between them.

For Indian investors choosing purely on expense ratio: VOO > CSPX > SPY. But the dividend and estate tax differences dwarf the expense ratio difference at meaningful portfolio sizes.

Dividend withholding: CSPX wins significantly

This is where CSPX's Ireland domicile creates a real advantage.

US-listed ETFs (SPY, VOO): 30% withholding

When a US company pays a dividend to a US-listed fund, the fund collects it without withholding (the fund is a US entity). When the fund distributes to you (an Indian resident, classified as a non-resident alien), the platform withholds 30% of the distribution. You receive 70 cents of every dollar paid out.

You can claim this 30% as a foreign tax credit in India using Form 67 (Rule 128 of Income Tax Rules). But it requires filing, tracking, and the gross dividend is also taxable at your Indian slab rate.

Effective process:

1. S&P 500 companies pay dividends to VOO at 100%
2. VOO distributes to you; platform withholds 30%
3. You receive 70% net
4. Indian tax: gross dividend (100%) taxable at slab rate; 30% credit via Form 67

CSPX (Ireland-domiciled, accumulating): 15% at fund level, nothing at investor level

Ireland has a tax treaty with the US that sets dividend withholding at 15% for Irish-domiciled funds. This applies inside the fund — when Apple pays a dividend to CSPX, the fund collects 85 cents of every dollar.

Because CSPX is an accumulating ETF, it does not distribute this to you. It reinvests dividends inside the fund, and the NAV rises. You, as an Indian investor:

• Receive no cash dividend (nothing to withhold at investor level)
• Pay no Indian income tax on the undistributed dividend
• Do not need to file Form 67 for dividend foreign tax credit
• Pay tax only when you sell — capital gains at LTCG or STCG rate

The 15% fund-level withholding is a permanent drag (not creditable by you), but it is 15% vs 30% for US-listed ETFs, and you avoid the annual Indian income tax drag on distributions.

10-year illustration on ₹10 lakh invested:

Assume 10% annual total return, 1.3% dividend yield, 30% Indian income tax slab:

ETF	Dividend treatment	10-year after-tax value (approx)
VOO	30% US WHT + 30% Indian tax on gross dividend	₹22.5 lakh
CSPX (accumulating)	15% inside fund; no annual income tax	₹25.0 lakh

CSPX's compounding advantage — no annual dividend income tax drag — is meaningful over long periods. This is the "gross roll-up" effect of accumulating UCITS funds.

US estate tax: the deciding factor at larger portfolios

This is the most important difference for Indian residents with significant US equity holdings.

Non-resident aliens (NRAs) — which includes all Indian tax residents — face US estate tax on US-situs assets above $60,000.

Asset	US-situs?	Estate tax exposed?
SPY held in US broker	Yes	Yes
VOO held in US broker	Yes	Yes
CSPX held anywhere	No (Ireland-domiciled)	No

The estate tax rate above $60,000 ranges from 18% to 40%.

VOO/SPY portfolio size	Estate tax exposure
$50,000	$0
$100,000	$16,000
$200,000	$56,000
$500,000	$176,000
$1,000,000	$376,000

CSPX has zero US estate tax exposure, regardless of portfolio size. It is not a US-situs asset.

The crossover point: At portfolios below ~$75,000, the estate tax exposure is relatively small. Above $150,000–$200,000, the estate tax liability on VOO/SPY becomes large enough that CSPX's structure advantage is worth the slightly higher expense ratio and the complexity of accessing LSE-listed securities.

Which ETF for which investor

Investor profile	Recommended ETF	Reason
Just starting, < $10,000	VOO or IVV via LRS platform	Simpler; estate tax exposure is within exemption
Building towards $50,000–$100,000	VOO for now; plan transition to CSPX	Keep it simple; start thinking about estate tax
Above $100,000 in US equity	CSPX	Estate tax exposure justifies UCITS structure
RSU holder with large company stock + S&P 500	CSPX for the ETF portion	Company RSU shares are already US-situs; cap estate tax on the diversified portion
Dividend income seeker	CSPX distributing class (CSPS) or VOO with Form 67 discipline	Depends on whether you want cash or compounding

How to buy each

VOO and SPY (US-listed): Available on Vested, INDmoney, and Rovia. Fractional shares from $1. Remit USD via LRS from Indian bank.

CSPX (LSE-listed):

• INDmoney (check current availability for LSE securities)
• Interactive Brokers India (supports LSE)
• Rovia (supports UCITS ETFs via Alpaca)
• Stockal/Borderless (check availability)

CSPX trades in USD on LSE. The ticker on the London Stock Exchange is CSPX (USD-denominated class). There is also a GBP-denominated class (ticker varies by platform). Buy the USD class unless you specifically want GBP exposure.

The IVV alternative

IVV (iShares Core S&P 500 ETF) deserves mention alongside VOO. It tracks the same index, has the same 0.03% expense ratio, is US-domiciled, and has the same estate tax exposure as VOO. For US-listed S&P 500 exposure, VOO and IVV are interchangeable. SPY has a higher expense ratio for no benefit to Indian long-term holders and is best avoided as a long-term holding (though it's fine for short-term tactical trades where SPY's liquidity matters).

Summary

	SPY	VOO / IVV	CSPX
Expense ratio	0.0945%	0.03%	0.07%
Dividend WHT	30%	30%	15% (inside fund)
Indian dividend tax	Yes, annually	Yes, annually	No (accumulating)
US estate tax	Yes	Yes	No
Complexity	Low	Low	Medium
Best for	Short-term traders	Portfolios < $100K	Portfolios > $100K

Related reading

• How to buy S&P 500 from India — step-by-step LRS guide
• UCITS ETFs vs US ETFs for Indian investors — full comparison including non-S&P 500 options
• LRS vs GIFT City for US stocks — which remittance route to use
• How US stocks are taxed in India — STCG, LTCG, Form 67, Schedule FA