UCITS vs US ETFs:
what 15 years of real returns reveal
Three ETF pairs. Up to 15.5 years of actual price data, converted to EUR. TER, withholding tax, FX costs, and tracking difference decomposed and stacked. The verdict may surprise you — 2 of 3 pairs favour the UCITS fund, even under a full tax treaty.
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TL;DR — what the data shows
Real prices, real periods, real costs
Monthly adjusted close prices from Alpha Vantage — not models, not estimates. All returns are total return (dividends reinvested) converted to EUR using end-of-month spot rates. WHT and FX costs layered on top of observed returns.
- CSPX — iShares S&P 500 UCITS (Acc), Ireland, TER 0.07%
- VOO — Vanguard S&P 500, US, TER 0.03%
- Oct 2010 – Mar 2026 · 15.5 yr · 186 months
- VWCE — Vanguard FTSE All-World UCITS (Acc), Ireland, TER 0.22%
- VT — Vanguard Total World Stock, US, TER 0.07%
- Aug 2019 – Mar 2026 · 6.7 yr · 80 months
- IWDA — iShares MSCI World UCITS (Acc), Ireland, TER 0.20%
- URTH — iShares MSCI World, US, TER 0.24%
- Feb 2012 – Mar 2026 · 14.2 yr · 170 months
CSPX vs VOO — 15.5 years of real returns
The only pair where the US fund has any edge — and it’s razor-thin under treaty conditions. Without a treaty, the math flips entirely.
Both ETFs track the S&P 500. CSPX accumulates dividends net of 15% WHT at Ireland fund level. VOO distributes quarterly — modeled at 15% and 30% WHT.
TER is the smallest layer. FX and withholding dominate — and you can control both.
VWCE vs VT — 6.7 years of real returns
Unlike the S&P 500 pair, VWCE wins in both WHT scenarios. VT’s lower TER is more than offset by FX conversion costs and a material tracking residual. EUR pricing removes an entire cost layer.
VWCE is EUR-priced on Xetra — no conversion needed. VT is USD-priced. Both track broad global equity, but different underlying indices.
VWCE’s zero FX conversion cost and a 0.38%/yr tracking residual on VT drive the outcome. The lower TER on VT doesn’t come close to offsetting these.
IWDA vs URTH — 14.2 years of real returns
Both track the same index — so every gap is purely operational. The surprise: URTH actually has a higher TER than IWDA. Not all US ETFs are cheaper.
Same underlying index, same exposure. The gap is operational: TER, fund size, tracking efficiency. IWDA manages $90B+; URTH manages ~$2B.
Same index, but URTH’s higher TER and 0.17%/yr tracking residual add up. IWDA benefits from scale and efficient operations.
Summary at a glance
Every number in one place. Annualized returns, total multipliers, drag, and the gap vs the UCITS fund.
| Metric | CSPX (UCITS) | VOO (15% WHT) | VOO (30% WHT) |
|---|---|---|---|
| EUR total return (×) | 8.67× | 8.72× | 8.36× |
| Annualized return (EUR) | 14.95% | 14.99% | 14.69% |
| Gap vs UCITS | — | +0.04%/yr | −0.26%/yr |
| TER | 0.07% | 0.03% | 0.03% |
| Total annual drag | ~0.58% | ~0.49% | ~0.75% |
| Metric | VWCE (UCITS) | VT (15% WHT) | VT (30% WHT) |
|---|---|---|---|
| EUR total return (×) | 2.11× | 2.06× | 2.02× |
| Annualized return (EUR) | 11.87% | 11.44% | 11.10% |
| Gap vs UCITS | — | −0.43%/yr | −0.77%/yr |
| TER | 0.22% | 0.07% | 0.07% |
| Total annual drag | ~0.51% | ~0.94% | ~1.23% |
| Metric | IWDA (UCITS) | URTH (15% WHT) | URTH (30% WHT) |
|---|---|---|---|
| EUR total return (×) | 5.00× | 4.87× | 4.68× |
| Annualized return (EUR) | 12.03% | 11.82% | 11.51% |
| Gap vs UCITS | — | −0.21%/yr | −0.53%/yr |
| TER | 0.20% | 0.24% | 0.24% |
| Total annual drag | ~0.69% | ~0.90% | ~1.19% |
FX conversion cost of 0.20% assumed for USD-priced routes; VWCE (EUR-priced on Xetra) requires no conversion. EUR/USD moved from 1.39 to 1.17 over the longest period (EUR weakened ~16%, boosting USD returns in EUR terms).
What “total drag” includes — and why TER is the smallest part
A one-line TER is not the full cost of owning an ETF from abroad. For a monthly investor converting EUR to buy USD assets, total drag is the sum of all recurring leaks — and they compound silently.
- Eligibility: Can you legally buy US-domiciled ETFs in your country?
- Treaty status: Does your country have a 15% WHT treaty with the US? If not, UCITS wins outright in all three pairs.
- Execution stack: FX + spreads + funding workflow. This repeats monthly and compounds for decades.
- Then: obsess over the last few basis points of TER or tracking. Not before.
Three conclusions, clearly ranked
Two of three pairs favour the UCITS fund even at 15% treaty WHT. Only VOO vs CSPX is a near-tie. The argument “US ETFs are cheaper for non-US investors” does not hold up under real-data scrutiny.
At 30% WHT, every US fund trails: VOO by −0.26%/yr, VT by −0.77%/yr, URTH by −0.53%/yr. If your country has no US tax treaty, the UCITS wrapper is unambiguously the right choice.
FX conversion costs apply regardless of wrapper and repeat every month. A EUR-priced UCITS fund (like VWCE) eliminates this entirely. A bad FX workflow costs more than the entire UCITS-vs-US debate.
Methodology
Monthly adjusted prices from Alpha Vantage for CSPX.LON, VOO, VWCE.DEX, VT, IWDA.LON, and URTH, plus EUR/USD monthly FX rates. All returns are total return (adjusted close includes dividend reinvestment). Cost layers are then applied on top.
Fix the biggest leaks first
Use IBKR for multi-currency funding and institutional FX rates. Use TradingView to keep research separate from execution — and avoid impulse decisions.
EU Investor Cost Toolkit (Spreadsheet)
Most investors only look at TER. FX, spreads, commissions, cash drag, and withholding tax all eat into your returns. This spreadsheet calculates everything in one place — 11 tabs, 739 formulas, no macros.
- Broker comparison (up to 3 side by side)
- UCITS vs US ETF drag — treaty & no-treaty
- 30-year projection with charts + dashboard
- Cadence breakeven, FX drag, spread cost
- EU / non-US investors buying USD ETFs
- Anyone comparing brokers or cadence
- People who want numbers, not opinions
- One-time setup you reuse for years
30-day money-back guarantee. Educational content only — not personalized investment or tax advice.
Go deeper
Frequently asked questions
Is a UCITS ETF always worse than a US-domiciled ETF?
No — in fact, two of three pairs in this study favour the UCITS fund even with 15% treaty WHT. VWCE beats VT by +0.43%/yr and IWDA beats URTH by +0.21%/yr. Only VOO narrowly edges CSPX by +0.04%/yr. Without a treaty (30% WHT), UCITS wins all three.
Why does VWCE beat VT when VT has a lower TER?
Three factors compound against VT: (1) VWCE is EUR-priced, eliminating the FX conversion cost VT requires; (2) VT’s FTSE Global All Cap index includes small caps that underperformed over this period; (3) a 0.38%/yr tracking residual reflecting index and operational differences. The 0.15% TER advantage doesn’t offset these.
What’s the fastest way to reduce total drag?
Fix the repeatable leaks first: (1) a broker with strong FX handling (the 0.20%/yr conversion cost applies to everyone buying USD-priced assets), (2) a liquid listing with tight spreads, (3) fewer conversions by batching. Or use a EUR-priced UCITS fund like VWCE and eliminate FX conversion entirely.
If I’m EU/UK retail and blocked from US ETFs, what should I do?
The data shows you’re barely missing out — and possibly better off. CSPX trailed VOO by just 0.04%/yr, while VWCE and IWDA both outperformed their US counterparts. Use UCITS equivalents, optimize execution, and stop worrying about the wrapper.
Why does FX matter so much for monthly investing?
Because you pay it on every contribution. A 0.20% spread on 12 monthly conversions is a permanent cost built into your cost base. Over 15+ years that compounds alongside your returns. EUR-priced funds like VWCE sidestep this entirely.
What should I optimize first: TER, tracking difference, or spreads?
Across all three pairs, TER was never the decisive layer. FX costs (0–20 bps), withholding (26–58 bps), and tracking residuals (5–38 bps) all mattered more. Optimize in this order: FX + spreads → withholding/treaty status → tracking difference → TER.
How did EUR/USD movement affect the comparison?
Over Pair 1’s 15.5-year period, EUR/USD fell from 1.39 to 1.17 (EUR weakened ~16%), boosting USD-asset returns in EUR terms. This lifted both ETFs in each pair equally — it doesn’t change the relative comparison. But it’s why EUR returns appear higher than USD returns over the same period.
Why is Pair 2 (VWCE vs VT) only 6.7 years?
VWCE launched in July 2019, so the overlap period starts August 2019. While 6.7 years is shorter than the other pairs, it covers the COVID crash and recovery, the 2022 drawdown, and the 2023–2025 rally — a full market cycle. The direction is clear even if the exact gap could narrow with more data.
What is the “tracking residual” in the drag charts?
The tracking residual is the portion of the observed gap that can’t be explained by known cost differences (TER, WHT, FX). It captures securities lending income, index sampling, operational efficiency, and index-composition differences between pairs. For CSPX vs VOO (same index), it’s just 0.05%/yr. For VWCE vs VT (different indices), it’s larger at 0.38%/yr.
QuantRoutine provides educational content only. Nothing on this page is an offer, solicitation, or recommendation to buy or sell any security or to open an account with any specific broker. Investments can lose value, and past performance does not guarantee future results. You are responsible for your own investment, tax, and legal decisions. Always review each broker’s current terms, fees, and eligibility on their official website before opening or funding an account.
Data source: Alpha Vantage (monthly adjusted prices for CSPX.LON, VOO, VWCE.DEX, VT, IWDA.LON, URTH; monthly EUR/USD FX rates). Periods: Pair 1 Oct 2010 – Mar 2026; Pair 2 Aug 2019 – Mar 2026; Pair 3 Feb 2012 – Mar 2026.