Invesco S&P 500 UCITS ETF: How to outperform the index

Invesco S&P 500 UCITS ETF: How to outperform the index

Investment risks

  • For complete information on risks, refer to the legal documents. The value of investments, and any income from them, will fluctuate. This may partly be the result of changes in exchange rates. Investors may not get back the full amount invested.

    This fund enters into transactions which expose it to the risk of bankruptcy, or other types of default, by the counterparties to those transactions.

    This fund enters into swap agreements that provide the performance of the Reference Index. These imply a range of risks including the possibility of an adjustment to, or even the early termination of, the swap agreement.

Accessing the largest market in the world

US equities may account for anywhere between 30-50% of the overall asset allocation in a typical globally diversified portfolio. Therefore, you should be able to make a significant impact on your portfolio’s performance by the way you gain exposure to the asset class.

Unfortunately, history shows that US large caps (as represented by the S&P 500 index) has been one of the toughest markets for investors to beat in any one year, much less on a consistent basis.

If, instead of an actively managed fund, you are looking for passive exposure to the S&P 500, you have the choice of around 15 ETFs in Europe that simply aim to deliver the index performance.

Some are more successful than others.

Invesco S&P 500 UCITS ETF

Our S&P 500 UCITS ETF has the lowest ongoing charge of any of its peers in Europe. However, that’s just part of this fund’s success story. What’s perhaps even more impressive – and possibly surprising – is that it’s outperformed the index consistently and with low tracking error. 
Past performance does not predict future returns

ETF performance versus the index
ETF performance versus the index

Source: Bloomberg, to 31 May 2021, in USD. 

How does our ETF outperform the index?

When developing our ETFs, we look for a structure that offers the most efficient exposure to the underlying index. That could mean physical replication or, in other instances, synthetic replication.

To track the S&P 500, we use a synthetic replication model that allows the ETF to receive gross dividends, i.e. virtually 100% of the dividend with no withholding tax. This is a clear advantage versus ETFs that replicate the index physically, as they would be subject to at least a 15% withholding tax rate on dividends.

More on our synthetic structure

With our synthetically replicated ETFs, we hold a basket of high-quality securities (not necessarily those of the underlying index) and arrange total return swaps with multiple large financial institutions. The swap counterparties are contracted to pay / receive any difference between the return of the basket and that of the index.

The use of multiple counterparties is intended to reduce the impact on the ETF if any of them were to default on their obligations.  The objective of our synthetic structure is to deliver the performance as closely and consistently as possible relative to the underlying index.

Sometimes this means our passive ETFs can even outperform the index. 

Our core ETFs

The Invesco S&P 500 UCITS ETF is part of our core ETFs range, which are among the lowest cost products available in Europe for exposure to core equity, fixed income and commodity benchmarks. We design our ETFs to provide efficient and consistent tracking of their reference indices, net of charges including transaction costs.

Find out more about our Core ETFs

Annual performance summary

  May 20

May 21
May 19

May 20
May 18

May 19
May 17

May 18
May 16

May 17
Dec 19
Dec 20
Dec 17
Dec 20
S&P 500 NTR index  39.65%







Invesco S&P 500 UCITS ETF















Source: Bloomberg, showing 12-month periods to 31 May 2021, in USD. 


  • *Source, Invesco as at 19 January 2022

Important information

  • This communication contains information that is for discussion purposes only, and is intended only for professional investors in Ireland, Austria, Germany, Spain, Finland, France, the UK, Italy, the Netherlands, Luxembourg, Norway, Sweden, Singapore, Qualified Clients in Israel and Qualified Investors in Switzerland. Marketing materials may only be distributed in other jurisdictions in compliance with private placement rules and local regulations.

    You consent to communicating with us in English, unless you inform us otherwise. Costs may increase or decrease as result of currency and exchange rate fluctuations. Consult the legal documents for further information on costs. The investment concerns the acquisition of units in a fund and not in a given underlying asset.

    For more information on our funds and the relevant risks, please refer to the share class-specific Key Investor Information Documents (available in local language), the Annual or Interim Reports, the Prospectus, and constituent documents, available from A summary of investor rights is available in English from The management company may terminate marketing arrangements.

    This communication is marketing material and is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication.

    This communication should not be considered financial advice. Persons interested in acquiring the fund should inform themselves as to (i) the legal requirements in the countries of their nationality, residence, ordinary residence or domicile; (ii) any foreign exchange controls and (iii) any relevant tax consequences.

    Any calculations and charts set out herein are indicative only, make certain assumptions and no guarantee is given that future performance or results will reflect the information herein.

    For details on fees and other charges, please consult the prospectus, the KIID/KID and the supplement of each product.

    UCITS ETF’s units / shares purchased on the secondary market cannot usually be sold directly back to UCITS ETF. Investors must buy and sell units / shares on a secondary market with the assistance of an intermediary (e.g. a stockbroker) and may incur fees for doing so. In addition, investors may pay more than the current net asset value when buying units / shares and may receive less than the current net asset value when selling them.

    Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and have been licensed for use by Invesco. The ETFs are not sponsored, endorsed, sold or promoted by S&P or its affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in the ETFs.

    Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.

    For the full objectives and investment policy please consult the current prospectus.

    German investors may obtain the offering documents free of charge in paper or electronic form from the issuer or from the German information and paying agent (Marcard, Stein & Co AG, Ballindamm 36, 20095 Hamburg, Germany).

    The publication of the supplement in Italy does not imply any judgment by CONSOB on an investment in a product. The list of products listed in Italy, and the offering documents for and the supplement of each ETF are available: (i) at (along with the audited annual report and the unaudited half-year reports); and (ii) on the website of the Italian Stock Exchange

    In Israel, the contents of this communication are restricted to Qualified Clients (pursuant to the First Schedule to the Israeli Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995) only and are not intended for retail or private investors who are not Qualified Clients.

    The representative and paying agent for the sub-funds of Invesco Markets plc in Switzerland is BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich, Switzerland. The offering documents, articles of incorporation and annual and semi-annual reports may be obtained free of charge from the representative in Switzerland. The ETFs are domiciled in Ireland.

    In Switzerland, the Funds are not registered for distribution with the Swiss Financial Market Supervisory Authority ("FINMA"). This document and any document relating to these products may be made available in Switzerland solely to Qualified Investors.

    Communicated by Invesco, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, authorised and regulated by the Financial Conduct Authority, Invesco Asset Management SA, 16-18 rue de Londres, 75009 Paris, France, Invesco Asset Management Deutschland GmbH, An der Welle 5, 60322 Frankfurt am Main, Germany, Invesco Asset Management (Schweiz) AG, Talacker 34, 8001 Zurich, Switzerland, and Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, United Kingdom. Authorised and regulated by the Financial Conduct Authority.