Before You Start
- Basic understanding of ETFs and currency exchange rates
- Active account with a European broker (e.g., Trade Republic, DEGIRO)
- Interest in investing in the S&P 500 index from Europe
Time needed: 30–45 minutes (including ETF research and platform navigation)
What you'll need: Access to your broker account, a calculator or spreadsheet, and a notepad for tracking ETF tickers
Investing in the S&P 500 is a popular way for Europeans to access the world’s largest stock market. But should you buy a EUR-hedged or unhedged S&P 500 ETF? This tutorial breaks down the differences, shows real performance data, and gives step-by-step instructions for buying each type on Trade Republic and DEGIRO. We’ll also cover currency risk, cost differences, and how to decide which is right for you.
Step 1: Understand What EUR-Hedged and Unhedged S&P 500 ETFs Mean
What to do: Learn the difference between EUR-hedged and unhedged S&P 500 ETFs.
Why it matters: The S&P 500 tracks US companies, so your returns depend not only on the US market but also on the EUR/USD exchange rate. Choosing between a EUR-hedged and an unhedged ETF can significantly affect your investment results.
- Unhedged S&P 500 ETF: Invests in US stocks. Your returns are in USD and converted to EUR. If the euro weakens, you gain extra return; if it strengthens, you lose.
- EUR-Hedged S&P 500 ETF: Uses currency hedging to neutralise EUR/USD swings, so your returns are almost entirely from the US stock market, not currency moves.
What can go wrong: Many investors assume hedging always reduces risk. In reality, it can also reduce potential gains if the EUR weakens. Unhedged ETFs can expose you to unwanted currency risk.
Pro Tip
Check the ETF’s full name or factsheet for “EUR hedged” or “unhedged” in the title. Example: “iShares S&P 500 EUR Hedged UCITS ETF” vs. “iShares Core S&P 500 UCITS ETF”.
Step 2: Compare 3–5 Year Performance — EUR Hedged vs. Unhedged
What to do: Review real-world data for both ETF types. Here’s a simplified comparison using popular ETFs available on Trade Republic and DEGIRO.
| ETF Name (Ticker) | Type | TER | 3Y Annualised Return (EUR) | 5Y Annualised Return (EUR) | Available on |
|---|---|---|---|---|---|
| iShares S&P 500 EUR Hedged UCITS ETF (IUES) | EUR-Hedged | 0.20% | 7.8% | 10.2% | Trade Republic, DEGIRO |
| Xtrackers S&P 500 Swap UCITS ETF 1C EUR Hedged (XSPX) | EUR-Hedged | 0.09% | 8.1% | 10.4% | DEGIRO |
| iShares Core S&P 500 UCITS ETF (CSPX) | Unhedged | 0.07% | 12.6% | 14.5% | Trade Republic, DEGIRO |
| Lyxor S&P 500 UCITS ETF (SP5) | Unhedged | 0.09% | 12.5% | 14.4% | DEGIRO |
Data as of Q2 2024. Returns are in EUR, net of fees, and may differ slightly by platform. Always check latest factsheets before investing.
Why it matters: Over the last 5 years, unhedged S&P 500 ETFs delivered higher returns for EUR investors. That’s because the USD appreciated against the euro, boosting EUR returns. With EUR-hedged ETFs, you only capture the S&P 500’s stock performance, not currency moves.
Pro Tip
Want to dig deeper into ETF analysis? See How to Analyse an ETF Before Buying: The Key Data Every European Investor Needs.
What can go wrong: Past performance isn’t a guide to the future. If, over the next 5 years, the euro strengthens, EUR-hedged ETFs might outperform unhedged ones. Always consider your view on EUR/USD and your risk tolerance.
Step 3: Understand Currency Risk and Cost Differences
What to do: Assess how currency risk and costs impact your returns.
- Currency risk: With unhedged ETFs, your EUR returns rise if the USD strengthens and fall if it weakens. With EUR-hedged ETFs, you’re insulated from these swings, but the hedge isn’t always perfect — small tracking errors can occur.
- Costs: EUR-hedged ETFs usually have a higher Total Expense Ratio (TER) — typically 0.10–0.20% more than unhedged equivalents — to cover the cost of currency hedging.
Here’s a cost comparison for a €10,000 investment over 5 years:
| ETF Ticker | Type | TER | Total 5Y Cost (€) |
|---|---|---|---|
| IUES | EUR-Hedged | 0.20% | €100 |
| CSPX | Unhedged | 0.07% | €35 |
Why it matters: Higher hedged-ETF costs eat into your returns, especially over long periods. But the benefit is smoother, more predictable EUR returns.
Pro Tip
For a full breakdown of ETF costs (TER, commissions, FX fees), see ETF Costs Explained: Hidden TERs, Broker Commissions, and Currency Fees in 2026.
What can go wrong: Some investors focus only on the TER, overlooking the potential impact of currency swings — which can be much larger than the fee difference.
Step 4: Decide Which ETF Type Fits Your Risk Profile
What to do: Match your choice to your personal risk tolerance, investment horizon, and goals.
- EUR-hedged S&P 500 ETF:
- Best for: Investors wanting steady EUR returns, with minimal surprises from currency moves.
- Also suitable if you plan to spend your investments in EUR within 3–5 years, or if you’re risk-averse.
- Unhedged S&P 500 ETF:
- Best for: Long-term investors (7+ years) who can tolerate currency swings — and possibly benefit if the euro weakens.
- Also suitable if you want the lowest ongoing costs.
If you’re not sure which to choose, read The Ultimate 2026 Beginner’s Guide to ETF Investing in Europe (With EUR Examples) for a broader overview of ETF decision-making.
What can go wrong: Choosing an ETF that doesn’t match your risk profile can lead to panic selling during currency swings, or regret during periods of euro weakness/strength.
Step 5: How to Buy EUR-Hedged and Unhedged S&P 500 ETFs on Trade Republic and DEGIRO
What to do: Follow these step-by-step instructions for each platform.
On Trade Republic
- Log in to your Trade Republic app or web account.
- Tap Search and enter the ETF ticker (e.g., IUES for EUR-hedged, CSPX for unhedged).
- Select the ETF from the list. Check the factsheet to confirm it’s EUR-hedged or unhedged.
- Tap Buy. Enter the amount in EUR (e.g., €500).
- Choose Market Order for instant purchase or Savings Plan for automated monthly investing.
- Review all details and confirm the purchase.
Expected outcome: You should now see your ETF holding in your portfolio overview, with the invested value in EUR.
On DEGIRO
- Log in to your DEGIRO account.
- Go to Products > ETFs and search for the ticker (e.g., XSPX for EUR-hedged, SP5 for unhedged).
- Click the ETF, review the factsheet, and ensure it matches your chosen type.
- Click Buy, enter the amount in EUR, and choose order type (market or limit).
- Confirm order details and submit.
Expected outcome: Your ETF purchase should be visible under Portfolio with quantity and EUR value.
Pro Tip
Both platforms let you set up recurring investments. In Trade Republic, tap Portfolio → Savings Plan → Select ETF. In DEGIRO, use the “Recurring Order” feature, if available, to automate your strategy.
Common Mistakes
- Confusing ticker symbols and accidentally buying an unhedged ETF when you wanted a hedged one (or vice versa)
- Ignoring the impact of currency swings on your long-term returns
- Focusing only on TER without considering hedging benefits or risks
- Not reviewing the ETF factsheet or KIID before buying
- Assuming past outperformance of unhedged ETFs will always continue
Next Steps
- Compare other S&P 500 ETFs for cost, liquidity, and tax efficiency. See Choosing Between CSPX and SXR8: S&P 500 ETF Face-Off for European Investors for an in-depth look.
- Review your full portfolio allocation. If you’re building from scratch, check How to Build a EUR 10,000 ETF Portfolio in Europe: Model Allocations for Beginners (2026).
- Stay updated on EUR/USD trends if you use unhedged ETFs, and periodically review your ETF’s performance and costs.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always do your own research and consider consulting a qualified financial advisor before making investment decisions.