The iShares Core S&P 500 ETF (IVV) tracks the S&P 500 Index, providing diversified exposure to the 500 largest publicly traded companies in the United States.
However, for long-term Indian investors, IVV carries a critical structural risk: the US estate tax. If you hold US-domiciled assets like IVV and your holdings exceed $60,000, your estate faces US estate tax at progressive rates of up to 40% on your death. On a $500,000 holding, that works out to roughly 29% of the portfolio.
This blog gives you all the information you need about the top UCITS alternatives. These alternatives track the same index and hold the same underlying companies, providing the same exposure without the risk of the US estate tax.
Table of contents
- Why Indians are looking for UCITS alternatives to IVV
- Popular UCITS alternatives for IVV
- Invest in UCITS ETFs with Paasa
Why Indians are looking for UCITS alternatives to IVV
Indian investors are shifting to UCITS alternatives because they solve the tax risks and inefficiencies of US ETFs like IVV while providing the exact same exposure.
- Estate Tax Protection: UCITS funds are typically domiciled in Ireland. They are not considered "US-situs" assets, meaning they are 100% exempt from US Estate Tax.
- Tax Deferral (Accumulation): Unlike IVV, which forces taxable cash dividends on you, many UCITS funds offer "Accumulating" classes that reinvest dividends automatically. This defers your Indian tax liability until you sell the fund, and converts what would have been slab-rate dividend income into capital gains.
To learn more about UCITS ETFs and why Indian investors are choosing them, read our guide on UCITS ETFs.
Popular UCITS alternatives for IVV
Here are the top three UCITS funds that track the S&P 500.
1. iShares Core S&P 500 UCITS ETF
This is the official European equivalent of IVV, managed by the same provider (BlackRock/iShares). It is the largest S&P 500 UCITS ETF in the world.
For long-term Indian investors, its Accumulating (Acc) structure is a key advantage. Instead of paying out dividends (which would be taxed at your income slab in India), the fund reinvests them in its holdings, which compounds your returns over a 10-20 year horizon.
- Ticker: CSPX (LSE, USD)
- Total Expense Ratio (TER): 0.07%
- Structure: Accumulating (Reinvests dividends)
- Top Holdings: NVIDIA, Apple, Microsoft, Amazon, Alphabet.
2. Vanguard S&P 500 UCITS ETF
Vanguard's S&P 500 UCITS ETF holds the same 500 companies through physical replication at the same 0.07% charge as CSPX. Its accumulating line, VUAA, reinvests dividends, while the distributing line, VUSA, pays them out in cash if you want income.
- Ticker: VUAA (LSE, USD), accumulating; VUSA (LSE) is the distributing line
- Total Expense Ratio (TER): 0.07%
- Structure: Accumulating (VUAA) or Distributing (VUSA)
- Top Holdings: NVIDIA, Apple, Microsoft, Amazon, Alphabet.
3. Invesco S&P 500 UCITS ETF
This fund does not hold the index constituents. It uses a swap, an agreement with a counterparty to deliver the index return, backed by a substitute basket of shares. That structure can avoid the US withholding tax on dividends that physical funds pay.
Its headline ongoing charge is 0.05%, but that is not the full cost. Invesco's factsheet lists a separate swap fee of 0.07% a year, which is built into the swap's return rather than charged separately, so the all-in cost is closer to 0.12%.
Judge it on tracking difference rather than the headline charge: on Invesco's figures to 30 September 2026, the fund returned 15.60% over one year and 311.46% over ten, against 15.34% and 296.24% for the index, a one-year tracking difference of about +0.26 percentage points (a negative figure would mean the fund lagged).
The trade-off is counterparty risk: if the counterparty failed to pay, the fund would fall back on its substitute equity basket, which could return less than the index.
- Ticker: SPXS (LSE, USD)
- Cost: 0.05% ongoing charge plus 0.07% swap fee
- Structure: Accumulating (Reinvests dividends)
- AUM: about $59.0 billion (as of September 2026)
- Replication: Synthetic, via swap with a substitute equity basket
More UCITS alternatives: UCITS alternatives to SPY and UCITS alternatives to VOO.
Related: What are UCITS ETFs? and Should you switch from US ETFs to UCITS?
Invest in UCITS ETFs with Paasa
Paasa is a global investing platform designed for Indian residents and NRIs. We provide direct access to 11 markets: the US, Canada, the UK, Germany, France, Switzerland, the Netherlands, South Korea, Japan, Hong Kong and Singapore.
This means you are not restricted to just US ETFs like IVV; you can also buy tax-efficient UCITS equivalents using Paasa.
The compliance advantage
Paasa makes global investing easy and also removes the compliance friction with a specialized layer built for Indian residents and NRIs:
- Schedule FA reporting: Exact reports you need for your Indian tax returns, eliminating the need for manual calculations.
- FEMA & LRS guidance: Guidance on FEMA regulations and LRS limits to ensure compliance.
Paasa also provides access to managed strategies, along with remittance and FEMA support.
Disclaimer
This article is intended for information only and does not constitute investment or tax advice. Investing in global markets entails risks, including currency risk, political risk, and market volatility. Please seek advice from qualified financial and tax professionals before acting.
