The Most Popular ETF in Europe Explained | Step-by-Step Guide

Summary

Tom Crosshill uses the iShares Core S&P 500 UCITS ETF USD (Acc) as a case study for evaluating and buying ETFs in Europe. He emphasizes that it is the largest ETF in Europe, not necessarily the best choice for every investor. Suitability depends on goals, risk tolerance, residence, and local tax rules.

ETF and market details

• Fund: iShares Core S&P 500 UCITS ETF, accumulating share class.
• Index and exposure: Tracks the S&P 500, comprising 500 large US companies. The ETF physically holds the underlying stocks and has 503 holdings because some index companies, including Alphabet, have multiple share classes.
• Fund manager and brand: iShares, a BlackRock brand.
• UCITS: Indicates that the fund is regulated under the European framework.
• Fund currency: USD. This describes the fund’s accounting currency and does not determine its trading currency. The same ETF can be listed in euros, pounds, or other currencies.
• Distribution policy: Accumulating (ACC), meaning dividends are retained and reinvested by the fund. A distributing version of an S&P 500 ETF is also available, but tax treatment varies by country.
• Replication: Physical. The presenter contrasts this with synthetic ETFs, which use swaps. He says synthetic funds investing in US stocks may benefit from different tax treatment and cites five-year performance figures of 111.8% for a synthetic Invesco S&P 500 ETF versus 109.8% for the physical fund. He cautions that synthetic structures are more complex and may carry additional risks.
• Size and age: About €117 billion in assets; launched in 2010. The presenter says he generally pays little attention to fund size above roughly €100 million, but is cautious about very small funds, such as those with about €5 million, because they may be closed. Closure can also create a tax bill if the investor has gains.
• Costs: TER shown as 0.07% annually, rounded to 0.1% in the Key Information Document (KID). He compares this with traditional bank-sold funds that may charge 1–2% or more annually.
• Price: About €618 per share at the time of the video. Share price alone does not indicate value or expected performance, but a high unit price can be inconvenient if a broker does not offer fractional shares.
• Performance figures shown: The ETF had gained about 710% from inception through 2025 and about 58% over three years. These are cumulative, not annualized, returns. The presenter stresses that historical performance is not a reliable basis for choosing an ETF.
• Risk and currency: The fund is long-only and unhedged. Euro- or pound-based investors therefore have currency exposure to the US dollar. The presenter says currency hedging has costs and drawbacks and is generally not recommended by most experts for long-term stock investments.
• Volatility: About 19%, described as typical for stock funds. The presenter says substantial yearly swings—including a loss of around 15% in a year—can be normal for equity investing.
• Holdings concentration: At the time shown, Nvidia was 7.7%, Microsoft 6.9%, and Apple 6.3%; the top 10 holdings made up 38% of the fund. The presenter flags the resulting concentration in large US technology companies. He says the fund is effectively almost entirely invested in US-listed companies, while noting that the database’s displayed 96% figure may be inaccurate.
• Domicile: Ireland. The presenter says Irish-domiciled funds are commonly preferred for US-stock exposure because of tax considerations, though he notes synthetic funds may differ.

ETF evaluation and buying framework

1. Find candidate funds. Use JustETF, a searchable database the presenter says covers more than 3,700 ETFs, and sort or filter to identify options.
2. Confirm the fund identity. Check the fund name and use its ISIN, a unique identifier, to distinguish it from similar ETFs. Verify details on the fund manager’s official website before investing.
3. Review key features. Check the index, accumulating or distributing policy, replication method, TER, fund size, inception date, holdings, currency exposure, and domicile.
4. Read the KID. The presenter highlights the standardized Key Information Document, particularly its costs and annual cost impact on page three, as well as its risk indicator. He says risk indicators of 4 or 5 are typical for stock funds, 1–3 for lower-risk bond or money-market funds, and 6 or 7 for structured or leveraged products.
5. Assess fit, not past returns. Historical charts include price changes, dividends, and fees, but the presenter cautions against selecting funds simply because they performed best in recent years. Strong recent performance may reflect a region or sector that is already expensive or may later fall out of favor.
6. Choose a listing and trading currency. The same ETF can be traded on different exchanges in different currencies. For example, the presenter mentions buying in euros or using the London listing in pounds. GBX denotes trading in pence, and CSP1 is the London listing symbol he gives. He describes Xetra as Europe’s largest venue for ETF trading.
7. Select a suitable broker. Consider safety and regulation, access to the desired ETFs, fees, and local tax reporting. Brokers named include Interactive Brokers, Saxo, DEGIRO, Trade Republic, and Trading 212.
8. Place the order. In a Trading 212 demonstration, he searches by ISIN, selects the euro listing, and buys 0.1 shares, worth about €62, at €617.67. The demo uses a market order for simplicity; he says he normally teaches limit orders to help control the purchase price.

Portfolio and risk cautions

• Adapt the portfolio to local tax rules. The presenter notes that accumulating and distributing funds may be treated differently in Austria, Switzerland, the UK, and Denmark. Spain may offer tax advantages for traditional index mutual funds over ETFs.
• Match risk to age, goals, and time horizon. A young investor may choose an all-stock portfolio, but stocks can fall by half and remain down for years. Investors nearer retirement may want a mix of stock and bond ETFs.
• Consider diversification beyond the S&P 500. The presenter points to geographic diversification, developed- and emerging-market stocks, Europe, and small-cap stocks as possible alternatives or complements. He cautions against concentrating a portfolio in one country and a handful of large US tech companies.
• Stay away from leveraged and inverse ETFs unless you understand their risks.
• The presenter says buying the S&P 500 is not always a mistake, but warns that past US outperformance does not guarantee future results. He urges investors to build a low-cost, diversified portfolio they can hold for the long term.

Disclosures

The presenter says the ETF example is not an investment recommendation and may be unsuitable—or a poor choice—for some viewers, depending on their circumstances and tax situation. He presents the content as education and encourages investors to verify fund information and consider their personal circumstances. The video also promotes his paid ETF training program.

Presenters and sources

• Presenter: Tom Crosshill.
• Sources and references mentioned: JustETF; BlackRock/iShares; Invesco; Warren Buffett; Jack Bogle. The video also refers viewers to fund documents and the official fund-provider website for verification.