VOO vs SPYL: What the ETF domicile means for Singapore investors

Related article: Looking to save on withholding taxes? Here’s how you can do it with ETFs.

That discussion becomes concrete when comparing the Vanguard S&P 500 ETF (NYSE: VOO) against the State Street SPDR S&P 500 UCITS ETF (LSE: SPYL). Both funds hold the same 500 US companies, use full physical replication and charge an identical 0.03% total expense ratio. On paper, the exposure is the same.

While both ETFs charge the same total expense ratio, processing fees are higher for LSE ETFs than for US-listed ETFs on our platform.

Another difference emerges once tax is layered in. For a Singapore-based investor, the domicile of the ETF drives outcomes as far as dividend WHT and even US estate tax exposure are concerned. This article walks through those differences and what they could mean for a long-term S&P 500 allocation.

Dividend withholding tax: fund level vs investor level

The first and most immediate difference between VOO and SPYL lies in dividend WHT.

VOO is a US-domiciled ETF. As a Singapore resident holding VOO directly, dividends are subject to a 30% WHT withheld at source at the investor level, the standard non-treaty rate the US applies to foreign holders of US securities.

SPYL is domiciled in Ireland. Under normal circumstances, a US company distributing dividends to a foreign entity would still face a 30% WHT. However, Ireland has a tax treaty with the US that reduces this fund-level withholding to 15% for Irish-domiciled ETFs such as SPYL. Crucially, this 15% is withheld at the fund level, not the investor level. Ireland itself does not impose any additional dividend WHT on distributions to non-Irish-resident investors, meaning a Singapore investor in SPYL effectively receives dividends net of only the 15% fund-level tax, with no additional investor-level withholding on top.

The net effect: VOO investors face an effective 30% WHT, while SPYL investors face an effective 15% WHT, half the rate.

Figure 1: Irish-domiciled ETFs offer tax savings relative to US-domiciled ETFs

Note: As a general rule for US-domiciled ETFs, investors in Singapore are subjected to a 30% WHT for its distributions. However, investors may be subjected to reduced WHT, or even exempted when there is a tax treaty between the foreign investor’s country of residence and the US.

Source: iShares.

Assuming an S&P 500 dividend yield of around 1.3%, that 15-percentage-point WHT saving translates into approximately 0.20% additional return each year. To put this in dollar terms, a USD 500,000 allocation to the S&P 500 yielding 1.3% would generate about USD 6,500 in annual dividends. At 30% WHT, a VOO investor loses roughly USD 1,950 a year to US tax; at 15% WHT, a SPYL investor loses roughly USD 975. That difference of close to USD 975 a year, while modest in isolation, recurs annually and compounds over a long investment horizon, particularly meaningful for investors using ETFs as a core, buy-and-hold building block.

US estate tax: the overlooked risk

While WHT differences are relatively well understood, the easily overlooked consideration is the US estate tax.

Under US tax law, non-US-resident individuals who hold US-situs assets valued above USD 60,000 are subject to US estate tax upon death, at rates up to 40%. US-situs assets refer to properties, investments and items that the US government considers to be physically or legally located within its jurisdiction.

This exemption threshold for non-US residents of only USD 60,000 is far lower than the multi-million-dollar exemption available to US citizens and residents. This means a Singapore investor holding VOO, or any US-domiciled ETF or individual US stock, above this threshold could, in the event of death, have their estate subject to US estate tax on the value of the US-situs holding.

This is a real and binding risk, not a theoretical one. Settling a US estate tax liability typically requires the estate to file a US estate tax return and can involve delays in the transfer of assets to beneficiaries while the matter is resolved, on top of the tax itself.

By contrast, SPYL is domiciled in Ireland and structured as a UCITS ETF. As it is not classified as a US-situs asset, holdings in SPYL fall outside the scope of US estate tax. As a result, investors are not exposed to US estate tax on their SPYL holdings, regardless of the size of their investment.

For investors building a substantial long-term allocation to US equities, whether through a lump sum or a Regular Savings Plan (RSP) over many years, this estate tax consideration can carry more weight than the annual WHT savings discussed above. Estate planning is highly individual and depends on total asset composition, and investors with meaningful US-situs exposure across multiple holdings should consider seeking independent tax or legal advice.

Distribution, cost and liquidity: what stays the same, and what doesn't

Dividends are automatically reinvested via SPYL

Beyond taxation, VOO and SPYL differ in another key aspect: their distribution policy. VOO is a distributing share class, paying out dividends in cash on a quarterly basis, leaving investors to decide whether and when to reinvest them. SPYL, by contrast, is an accumulating share class that automatically reinvests dividends back into the fund rather than paying them out as cash. For long-term investors, this helps to maximise the power of compounding by keeping the entire investment continuously invested, while eliminating the need to manually reinvest dividend payments.

Both have a low annual expense ratio of 0.03%

From a cost perspective, the two funds are essentially identical. SPYL carries a total expense ratio (TER) of 0.03%, matching VOO's 0.03%, and is among the lowest-cost UCITS ETFs tracking the S&P 500 on the market.

While both ETFs charge the same total expense ratio, processing fees are higher for LSE ETFs than for US-listed ETFs on our platform.

VOO trades more actively on-screen, though true liquidity is comparable

Where the two funds diverge meaningfully is in on-screen trading activity. VOO is a considerably larger and more established fund, with assets under management (AUM) of roughly USD 977 billion versus SPYL's roughly USD 42 billion. This size difference is reflected in on-screen trading liquidity: VOO's 1-year average daily traded value is around USD 5.97 billion compared to SPYL's USD 0.12 billion.

It is worth noting, however, that these figures reflect on-screen liquidity rather than the funds' true liquidity ceiling. Because VOO and SPYL are both full physical replicators of the S&P 500, their underlying liquidity is ultimately governed by the liquidity of the index constituents themselves, some of the most heavily traded stocks in the world, rather than by each ETF's own on-screen trading volume.

For large trades, specialist market makers (or authorised participants) can create or redeem units directly against the underlying basket, meaning size that looks constrained by SPYL's on-screen volume can often still be executed efficiently through these channels.

That said, VOO's much deeper on-screen liquidity and longer track record are not without practical relevance. Tighter on-screen spreads and a longer history of heavy trading may still offer a smoother experience for very large or time-sensitive orders.

For most retail investors making periodic purchases, this distinction has little practical impact, and SPYL's liquidity remains more than sufficient for typical investment sizes.

Table 1: VOO vs SPYL at a glance

	NYSE: VOO	LSE: SPYL
Fund Name	Vanguard S&P 500 ETF	State Street SPDR S&P 500 UCITS ETF
Domicile	United States	Ireland
Dividend WHT (Singapore investor)	30%, at the investor level	15%, at fund level
US Estate Tax Exposure	Yes, up to 40% above USD 60,000	None, not a US-situs asset
Distribution Policy	Distributing (quarterly)	Accumulating
Total Expense Ratio	0.03%	0.03%
Assets Under Management (USD billion)	USD 977	USD 42
Replication	Full physical	Full physical
Source: Bloomberg Finance L.P. Data as of 1 July 2026.

Same exposure, but tax treatment sets them apart

VOO and SPYL offer Singapore investors the same underlying exposure to the S&P 500 at the same rock-bottom cost of an annual expense ratio of 0.03%. However, processing fees on our platform are higher for LSE-listed ETFs like SPYL than for US-listed ETFs like VOO, making VOO the cheaper option for investors.

For investors prioritising after-tax income, SPYL's 15% WHT, versus VOO's 30%, offers a recurring and compounding advantage over a long holding period. For investors more concerned with estate planning, SPYL's Irish domicile removes US estate tax exposure entirely, a consideration that grows more important as an investor's US equity allocation grows in size. SPYL's accumulating structure also offers a simpler, more hands-off way to compound returns over time.

That said, VOO's longer track record and much higher on-screen trading volume are not without practical relevance. Its tighter on-screen spreads and larger, more competitive base of market makers may still offer a smoother experience for investors placing very large or time-sensitive orders on-screen, or who simply place a premium on trading a highly established, heavily traded fund.

Taken together, the choice between VOO and SPYL depends less on liquidity, which is comparable at the underlying level, and more on an investor's tax priorities and estate planning considerations.

Declaration:

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities.

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report — including all investment theses, ratings, price targets and conclusions — has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.