UCITS vs US ETF total drag

📊 Data Study

UCITS vs US ETFs:
what 15 years of real returns reveal

By Francesco Cipolli · Published January 2026 · Updated September 2026 · Data to May 2026 · How we research and rate

Three ETF pairs. Up to 15.6 years of actual price data, converted to EUR. TER, withholding tax, FX costs, and tracking residual decomposed and stacked. The verdict is clear — all 3 pairs favour the UCITS fund, even under a full tax treaty.

3
ETF pairs tested
15.6yr
Longest data window
3/3
Pairs won by UCITS
TER
Never decided a pair
S&P 500 (Pair 1) → All-World (Pair 2) MSCI World (Pair 3) Summary table
UCITS vs US ETF total drag study hero banner comparing the long-term performance impact of taxes, withholding, fees, and FX costs between UCITS ETFs and US-listed ETFs, illustrated with side-by-side charts, cash stacks, and drag indicators reducing final returns.

Some of the links on this site are affiliate links, meaning we may earn a commission at no extra cost to you if you sign up through them. This does not affect our reviews or recommendations — we only feature products we genuinely believe are useful for investors. This site provides educational content only, not personalized investment advice. Investments can lose value and past performance does not guarantee future results. You are responsible for your own financial decisions and for confirming the tax and legal rules that apply in your country.

Quick verdict

TL;DR — what the data shows

S&P 500 UCITS wins both scenarios. CSPX beats VOO by +0.07%/yr at 15% WHT and +0.38%/yr without a treaty. VOO’s lower TER is outweighed by how the two funds tracked the same index.
All-World UCITS wins clearly. VWCE beats VT by +0.69%/yr at 15% WHT, +1.03%/yr without a treaty. The observed gap comes from tracking: VWCE follows the FTSE All-World, VT the FTSE Global All Cap, which adds small caps.
MSCI World UCITS wins both scenarios. IWDA beats URTH by +0.34%/yr (treaty) and +0.66%/yr (no treaty). URTH actually has a higher TER than IWDA.
Bottom line UCITS wins all three pairs here. This study models withholding at the same 15% treaty rate on both routes, so what separates these pairs at that rate is fees and tracking, not the wrapper. Execution — FX, spreads, consistency — is the part you control, and it repeats on every contribution whichever fund you pick.
Data & methodology

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. Withholding is modelled on top of the observed returns; FX transaction cost appears only in the separate modelled drag stacks.

Pair 1 — S&P 500
  • CSPX — iShares S&P 500 UCITS (Acc), Ireland, TER 0.07%
  • VOO — Vanguard S&P 500, US, TER 0.03%
  • Oct 2010 – May 2026 · 15.6 yr · 187 monthly returns
Pair 2 — FTSE All-World
  • VWCE — Vanguard FTSE All-World UCITS (Acc), Ireland, TER 0.19%
  • VT — Vanguard Total World Stock, US, TER 0.06%
  • Aug 2019 – May 2026 · 6.8 yr · 81 monthly returns
Pair 3 — MSCI World
  • IWDA — iShares MSCI World UCITS (Acc), Ireland, TER 0.20%
  • URTH — iShares MSCI World, US, TER 0.24%
  • Feb 2012 – May 2026 · 14.3 yr · 171 monthly returns
Assumptions (all pairs): WHT modelled at 15% (treaty, e.g. NL/DE/FR) and 30% (no treaty) on each actual dividend payment. Average yields: VOO 1.74%/yr, VT 1.94%/yr, URTH 1.94%/yr. FX transaction cost is a modelled input, set at 0.20% one-way on USD purchases; VWCE is EUR-priced on Xetra, so no conversion is applied to it. The drag stacks carry it as 0.20%/yr, as if the whole holding were converted every year; for a monthly investor with a growing portfolio the true annual figure is lower, so the FX bar is an upper bound and the 0% case in the sensitivity note below the summary tables is the floor.

Two views, read them separately. The return charts and the summary tables are observed EUR total returns with withholding modelled on top — they contain no FX transaction cost. The drag-stack bar charts are a modelled breakdown that adds it. The tracking residual in each stack is derived as the part of the observed treaty-rate gap that TER and withholding don’t explain, so at the 15% rate the modelled gap equals the observed gap in Pairs 1 and 3, and exceeds it by exactly the 0.20% FX layer in Pair 2. At 30% the stacks land within 0.05%/yr of the observed gaps, because modelled withholding (average yield × rate) is an approximation.
Pair 1 · S&P 500
🟢 UCITS wins — both scenarios

CSPX vs VOO — 15.6 years of real returns

With 15.6 years of data, CSPX leads in both WHT scenarios despite VOO’s lower TER. Both funds track the same index, so the difference is in how well each tracked it — a reminder that TER alone doesn’t tell the full story.

EUR growth of €1 invested · Oct 2010 – May 2026

Both ETFs track the S&P 500. CSPX accumulates dividends net of 15% WHT at Ireland fund level. VOO distributes quarterly — modelled at 15% and 30% WHT.

CSPX (UCITS, acc) — 16.03%/yr VOO 15% WHT — 15.97%/yr VOO 30% WHT — 15.66%/yr
With 15% treaty
+0.07%/yr
CSPX advantage over VOO
Without treaty (30% WHT)
+0.38%/yr
CSPX advantage widens further
Modelled annual drag stack — where the costs come from (%/yr)

Withholding and FX are the largest layers, but at the treaty rate both are identical on the two routes, so what separates this pair is TER and the tracking residual.

TER Withholding tax FX conversion (modelled) Tracking residual
Modelled drag: CSPX ~0.53%/yr · VOO (15% treaty) ~0.60%/yr · VOO (30%) ~0.86%/yr. At the treaty rate the modelled gap matches the observed +0.07%/yr: VOO’s 0.04% TER saving is outweighed by a 0.11%/yr tracking residual. Same index, so the residual is how the two funds actually tracked it.
Pair 2 · FTSE All-World
🟢 UCITS wins — both scenarios

VWCE vs VT — 6.8 years of real returns

VWCE wins clearly in both WHT scenarios. VT’s lower TER is more than offset by a tracking gap: the two funds follow different indices, VWCE the FTSE All-World and VT the FTSE Global All Cap, which adds small caps. The observed returns below contain no FX cost. EUR pricing matters only in the modelled drag view further down, where it spares VWCE the FX conversion layer.

EUR growth of €1 invested · Aug 2019 – May 2026

VWCE is EUR-priced on Xetra — no conversion needed. VT is USD-priced. Both track broad global equity, but different underlying indices.

VWCE (UCITS, acc) — 14.06%/yr VT 15% WHT — 13.36%/yr VT 30% WHT — 13.02%/yr
With 15% treaty
+0.69%/yr
VWCE advantage over VT
Without treaty (30% WHT)
+1.03%/yr
VWCE advantage widens further
Modelled annual drag stack — where the costs come from (%/yr)

In the modelled stack, VWCE’s zero FX conversion cost and a 0.82%/yr tracking residual on VT drive the difference, and VT’s 0.13% TER advantage doesn’t come close to offsetting them. Only the tracking part applies to the observed +0.69%/yr above, which contains no FX.

TER Withholding tax FX conversion (modelled) Tracking residual
Modelled drag: VWCE ~0.48%/yr · VT (15%) ~1.37%/yr · VT (30%) ~1.66%/yr, including the modelled 0.20% FX cost on VT and none on VWCE. A EUR-priced UCITS fund removes an entire cost layer that repeats every month. The modelled gap at the treaty rate (0.89%/yr) is the observed +0.69%/yr plus that FX layer. The residual also absorbs anything the model leaves out, since this study applies the same withholding rate to both funds.
Pair 3 · MSCI World
🟢 UCITS wins — both scenarios

IWDA vs URTH — 14.3 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.

EUR growth of €1 invested · Feb 2012 – May 2026

Same underlying index, same exposure. The gap is operational: TER and tracking efficiency.

IWDA (UCITS, acc) — 13.04%/yr URTH 15% WHT — 12.70%/yr URTH 30% WHT — 12.38%/yr
With 15% treaty · €10k over 14.3yr
€2,400
Extra in IWDA vs URTH (€57,360 vs €54,941)
URTH TER vs IWDA
+0.04%
URTH is more expensive than IWDA
Modelled annual drag stack — where the costs come from (%/yr)

Same index, but URTH’s higher TER and 0.30%/yr tracking residual add up.

TER Withholding tax FX conversion (modelled) Tracking residual
Modelled drag: IWDA ~0.69%/yr · URTH (15%) ~1.03%/yr · URTH (30%) ~1.32%/yr, both carrying the same modelled 0.20% FX cost. Not all US ETFs are cheaper — URTH carries a higher TER than IWDA and a tracking residual on top. At the treaty rate the modelled gap matches the observed +0.34%/yr.
All three pairs

Summary at a glance

Every number in one place. Annualized returns, total multipliers, modelled drag, and the gap vs the UCITS fund.

S&P 500 CSPX vs VOO · Oct 2010 – May 2026 · 15.6 yr
Metric CSPX (UCITS) VOO (15% WHT) VOO (30% WHT)
EUR total return (×) 10.15× 10.06× 9.65×
Annualized return (EUR) 16.03% 15.97% 15.66%
Gap vs UCITS — −0.07%/yr −0.38%/yr
TER 0.07% 0.03% 0.03%
Modelled annual drag ~0.53% ~0.60% ~0.86%
FTSE All-World VWCE vs VT · Aug 2019 – May 2026 · 6.8 yr
Metric VWCE (UCITS) VT (15% WHT) VT (30% WHT)
EUR total return (×) 2.43× 2.33× 2.29×
Annualized return (EUR) 14.06% 13.36% 13.02%
Gap vs UCITS — −0.69%/yr −1.03%/yr
TER 0.19% 0.06% 0.06%
Modelled annual drag ~0.48% ~1.37% ~1.66%
MSCI World IWDA vs URTH · Feb 2012 – May 2026 · 14.3 yr
Metric IWDA (UCITS) URTH (15% WHT) URTH (30% WHT)
EUR total return (×) 5.74× 5.49× 5.28×
Annualized return (EUR) 13.04% 12.70% 12.38%
Gap vs UCITS — −0.34%/yr −0.66%/yr
TER 0.20% 0.24% 0.24%
Modelled annual drag ~0.69% ~1.03% ~1.32%

Source: Alpha Vantage monthly adjusted close and EUR/USD, series through May 2026; TERs from issuer documents read 28 September 2026 (listed under Methodology). Returns and gaps in the three tables above are observed EUR total returns with withholding modelled on top, annualized over the number of monthly returns in each window. They contain no FX transaction cost, so the FX assumption does not affect any return ranking on this page; the modelled drag rows include it. EUR/USD moved from 1.39 to ~1.17 over the longest period (EUR weakened ~16%, boosting USD returns in EUR terms) — this lifted both funds in each pair equally.

Sensitivity of the modelled drag charts to the FX assumption: setting FX to 0% for both routes leaves the drag ordering unchanged in all six scenarios. Pair 1 becomes CSPX ~0.33%/yr vs VOO ~0.40%/yr (treaty) and ~0.66%/yr (no treaty); Pair 2 becomes VWCE ~0.48%/yr vs VT ~1.17%/yr and ~1.46%/yr; Pair 3 becomes IWDA ~0.49%/yr vs URTH ~0.83%/yr and ~1.12%/yr. With FX at 0%, the modelled gap at the treaty rate equals the observed gap in all three pairs.

Cost anatomy

What “total drag” includes — and why TER rarely decides it

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.

The cost layers
FX conversion
Spread + fees every time you convert EUR→USD. Modelled here at ~0.20% per buy. VWCE avoids this entirely.
Withholding tax
UCITS funds embed 15% at Ireland fund level. US funds pass it to you — at 15% or 30% depending on your country’s treaty.
Tracking residual
The part of the observed gap between a UCITS fund and its US counterpart that TER and withholding differences don’t explain. Ranges from 0.11%/yr (CSPX vs VOO, same index) to 0.82%/yr (VWCE vs VT, different indices) in this study, so the VT figure includes the index difference, not only fund-level frictions.
TER
The one everyone obsesses over. In this study the fund with the lower TER lost two of the three pairs.
Decision order
  1. Eligibility: Can you legally buy US-domiciled ETFs in your country?
  2. Treaty status: Does your country have a 15% WHT treaty with the US? If not, UCITS wins outright in all three pairs here. If it does, this study models the withholding layer at the same rate on both routes, and the difference comes from fees and tracking instead.
  3. Fund choice: Compare tracking record, not just TER. In these pairs tracking moved the result more than TER did.
  4. Execution: FX + spreads + funding workflow. This repeats on every contribution and is the layer you control.
Applying step 2 to a portfolio you already hold: this study models withholding at 15% and 30% because the rate depends on your country’s treaty position and on each fund’s domicile. Working that out across a real portfolio means doing it per holding. BorderFolio estimates cross-border dividend withholding on each position from the fund’s domicile and the tax residence you configure, and builds the portfolio from an uploaded broker statement (PDF or CSV) rather than manual entry. There is a free plan and a paid tier above it.
Takeaways

Three conclusions, clearly ranked

1
UCITS wins all three pairs

All three pairs favour the UCITS fund even at 15% treaty WHT. No US fund outperforms its UCITS equivalent in either WHT scenario across these three pairs. The blanket argument that US ETFs are cheaper for non-US investors does not survive contact with the data. This study models withholding at the same rate on both routes at 15%, so the margin there comes from fees and tracking; a pair with a wider fee gap could run the other way.

2
Without a treaty, UCITS wins all three — wider

At 30% WHT, every US fund trails further: VOO by −0.38%/yr, VT by −1.03%/yr, URTH by −0.66%/yr. If your country has no US tax treaty, the withholding saving is large enough to decide all three of these pairs in the UCITS fund’s favour.

3
Fix FX and spreads — the layer you control

FX conversion costs apply to any USD-priced listing, UCITS or US, and repeat on every contribution. A EUR-priced UCITS fund (like VWCE) eliminates them entirely. It is the one cost layer you fully control, but not the larger number: a conversion spread is paid once on each contribution, while the fund gaps in this study compound every year.

How we built this

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). Withholding is then applied on top; the other cost layers appear only in the modelled drag stacks. See also how we research and rate.

UCITS total return (CSPX, VWCE, IWDA)
Adjusted close series — accumulating funds already reflect dividends reinvested net of ~15% US WHT at Ireland fund level.
US total return (VOO, VT, URTH)
Adjusted close gives gross total return. WHT drag modelled by applying a 15% or 30% haircut on each actual dividend payment, reducing cumulative growth month by month.
EUR conversion
USD-priced return series divided by (EUR/USDt / EUR/USD0). VWCE is already in EUR — no conversion applied.
Annualization
Each window is annualized over its number of monthly returns, one fewer than its number of month-end prices: 187 for Pair 1, 81 for Pair 2, 171 for Pair 3.
Tracking residual
The observed gap at the 15% treaty rate minus the TER difference (withholding is modelled at the same rate on both routes there, and observed returns contain no FX). Charged to the fund that trailed: 0.11%/yr on VOO (CSPX vs VOO, same index), 0.82%/yr on VT (VWCE vs VT, different indices), 0.30%/yr on URTH (IWDA vs URTH, same index).
Sources and verification dates
Source Used for Read / data as of
Alpha Vantage, monthly adjusted close (CSPX.LON, VOO, VWCE.DEX, VT, IWDA.LON, URTH) and monthly EUR/USD Price series, dividends, FX rates, average yields Series through May 2026
Vanguard, VOO fact sheet VOO TER 0.03% 28 Sep 2026
Vanguard, VT fact sheet VT TER 0.06% 28 Sep 2026
Vanguard, FTSE All-World UCITS ETF (USD) Acc fact sheet VWCE ongoing charges 0.19% 28 Sep 2026
iShares, CSPX fact sheet CSPX TER 0.07% 28 Sep 2026
BlackRock, iShares Core MSCI World UCITS ETF fact sheet IWDA TER 0.20% 28 Sep 2026
iShares, URTH product page URTH expense ratio 0.24% 28 Sep 2026
QuantRoutine model FX cost 0.20% one-way; withholding at 15% and 30% Modelled, not read from a source

Fix the leaks you control

Use IBKR for multi-currency funding and FX conversion. Use TradingView to keep research separate from execution — and avoid impulse decisions.

Open IBKR → Cheapest FX guide → Try TradingView Pro →
Toolkit

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.

What you get
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  • Cadence breakeven, FX drag, spread cost
Best for
  • EU / non-US investors buying USD ETFs
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30-day money-back guarantee. Educational content only — not personalized investment or tax advice.

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FAQ

Frequently asked questions

Is a UCITS ETF always worse than a US-domiciled ETF?

No. In this study, all three pairs favour the UCITS fund even with 15% treaty withholding. CSPX beats VOO by 0.07% per year, VWCE beats VT by 0.69% per year, and IWDA beats URTH by 0.34% per year. Without a treaty (30% withholding), the UCITS advantage widens in every pair.

Why does VWCE beat VT when VT has a lower TER?

Not because of FX: the observed returns in this study contain no FX transaction cost. The gap comes from tracking. VWCE follows the FTSE All-World index, while VT follows the FTSE Global All Cap, which adds small caps that underperformed over this period. The modelled drag stack shows this as a 0.82% per year tracking residual on VT, which also absorbs anything else the model leaves out. VT’s 0.13% TER advantage does not offset it. EUR pricing is a separate saving: an investor converting EUR also avoids the FX cost VT requires, which is not part of the observed 0.69% per year gap.

What is the fastest way to reduce total drag?

Fix the repeatable leaks first: a broker with strong FX handling, a liquid listing with tight spreads, and fewer conversions. Or use a EUR-priced UCITS fund like VWCE and remove FX conversion entirely. FX is not the largest layer in this study, but it is the one you fully control.

If I am EU or UK retail and blocked from US ETFs, what should I do?

The data shows you are not missing out. All three UCITS funds (CSPX, VWCE and IWDA) outperformed their US counterparts over the full period, even at 15% treaty withholding. Use UCITS equivalents and put the effort into execution. This study models withholding at the same rate on both routes, so the gaps it measures come from fees and tracking rather than from the wrapper.

Why does FX matter so much for monthly investing?

Because you pay it on every contribution, on any USD-priced listing, UCITS or US. A 0.20% spread on 12 monthly conversions takes 0.20% off each contribution before it is invested. That percentage does not grow over time, so FX is not the largest cost in this study, but it is the layer you fully control. EUR-priced funds like VWCE sidestep it entirely.

What should I optimize first: TER, tracking difference, or spreads?

Across all three pairs, TER was never the decisive layer: the fund with the lower TER lost two of the three pairs. In the modelled drag stacks, withholding runs 26 to 58 basis points, tracking residuals 11 to 82 and FX 0 to 20. Compare funds on withholding and tracking record before TER, then fix FX and spreads, which you control on every contribution.

How did EUR/USD movement affect the comparison?

Over Pair 1’s 15.6-year period, EUR/USD fell from 1.39 to about 1.17, so the EUR weakened about 16% and USD assets returned more in EUR terms. This lifted both funds in each pair equally, so it does not change the relative comparison. It is why EUR returns appear higher than USD returns over the same period.

Why is Pair 2 (VWCE vs VT) only 6.8 years?

VWCE launched in July 2019, so the overlap starts in August 2019. The window is shorter than the other pairs, but it covers the COVID crash and recovery, the 2022 drawdown and the 2023 to 2025 rally. The direction is clear even if the exact gap could narrow with more data.

What is the tracking residual in the drag charts?

It is the part of the observed gap at the 15% treaty rate that TER and withholding differences do not explain (observed returns contain no FX cost). It captures securities lending, index sampling, operational efficiency, index composition differences and anything else the model leaves out. For CSPX vs VOO (same index) it is 0.11% per year on VOO; for VWCE vs VT (different indices) it is 0.82% per year on VT.

Citing this study

Reference and corrections

Canonical URL
https://quantroutine.com/studies/ucits-vs-us-etfs-total-drag/
Suggested citation
Francesco C. (2026). UCITS vs US ETFs: Real-Data Total Drag Study (2010-2026). QuantRoutine. https://quantroutine.com/studies/ucits-vs-us-etfs-total-drag/
Corrections
Found an error in the data or the method? Write to francesco@quantroutine.com with the figure and the source, and corrections are made on the page with the change noted.
Correction note (September 2026)
Annualized returns were recalculated over the correct number of monthly returns (previously one month too many), which raised each by 0.08 to 0.19 points and moved the Pair 1 and Pair 2 gaps by 0.01 points; the longest window is 15.6 years, not 15.7. VT’s TER was updated to 0.06% per Vanguard’s fact sheet. Tracking residuals and modelled drag totals were recomputed to match the residual’s stated definition. Out-of-date fund-size figures were removed. No ranking changed.
Reuse
Charts and figures may be reproduced with attribution and a link to the canonical URL above.

Some of the links on this site are affiliate links, meaning we may earn a commission at no extra cost to you if you sign up through them. This does not affect our reviews or recommendations — we only feature products we genuinely believe are useful for investors. This site provides educational content only, not personalized investment advice. Investments can lose value and past performance does not guarantee future results. You are responsible for your own financial decisions and for confirming the tax and legal rules that apply in your country.

Data source: Alpha Vantage (monthly adjusted prices for CSPX.LON, VOO, VWCE.DEX, VT, IWDA.LON, URTH; monthly EUR/USD FX rates), series through May 2026. Periods: Pair 1 Oct 2010 – May 2026; Pair 2 Aug 2019 – May 2026; Pair 3 Feb 2012 – May 2026. TERs from issuer documents read 28 September 2026.