What to do if you cannot trade SSO where you live.
Unfortunately, SSO cannot be traded by non-proffessional traders from the European Union.
Since 2018 EU residents can’t trade US-domiciled ETFs because of EU legislation that most US-registered ETFs cannot comply with.
Fortunately, SPW signals can also be applied to European ETFs, and there are good alternatives available. We focus here on two options:
1. Xtrackers S&P 500 2x Leveraged Daily Swap UCITS ETF 1C (XS2D)
- This leveraged ETF closely tracks the daily performance of the S&P 500 using swaps.
- Performance: From 2010 to 2024, trading XS2D with SPW achieved a CAGR of ~18% with a maximum drawdown around 25%.
- Advantage: The leverage allows results comparable to those originally obtained with SSO.
- Risk: Higher volatility and deeper drawdowns than with a non-leveraged ETF.
- Vanguard S&P 500 UCITS ETF USD Accumulation (VUAA.DE). This non-leveraged ETF is ideal for risk-averse investors. You should expect a lower CAGR but also a smaller drawdown (8%) compared to XS2D. Note that VUAA’s performance data covers a shorter period.
Figures below show how SPW significantly improves over a simple buy-and-hold strategy, both in cumulative returns and in maximum drawdown:
2. Vanguard S&P 500 UCITS ETF USD Accumulation (VUSA.DE)
This is a non-leveraged ETF, ideal for more risk-averse investors. It fully replicates the S&P 500 and reinvests profits (accumulating shares).
- Performance: From 2020 to 2024, trading VUAA with SPW achieved a CAGR close to 18% with a maximum drawdown of only ~8%.
- Advantage: Very low capital fluctuation compared to the market (SP500 DD of ~34%).
- Limitation: Data is shorter (2020-2024), so results may look deceptively high compared to the longer XS2D test. Over the long run, CAGR should be lower than XS2D because it is not leveraged.
Please be aware that European markets open earlier than in the USA. Any orders must be placed before the European market opens.
Currency considerations (EUR/USD)
Both XS2D and VUAA are listed in Euros, but their performance ultimately depends on the US dollar.
- When the EUR/USD exchange rate falls (the Euro weakens), your EUR-based returns are higher.
- When the EUR/USD exchange rate rises (the Euro strengthens), your EUR-based returns are lower.
Over the long term, EUR/USD fluctuations tend to balance out, but in shorter time frames the effect can be noticeable.
Example: valuing the same VUSA trades in EUR vs USD
The chart below cumulates the PnL of the exact same VUSA trades from the start of this blog, once valued in euros and once valued in US dollars at the entry and exit FX rates. The divergence comes purely from EUR/USD moves.
Table – Same trades, different valuation currency
- Total PnL in EUR: €1,963
- Total PnL in USD: $2,727
Takeaway: you don’t need to convert currency to buy XS2D or VUAA on a EUR account, but your results still reflect the EUR/USD trend. For long-term investors the FX effect is typically secondary to equity risk; for shorter horizons it can amplify or dampen outcomes.
The content on this site is for informational and educational purposes only. It does not constitute financial, legal, or investment advice. The strategies shared reflect personal research and experience and may not be suitable for others. Always consult an independent financial advisor before making investment decisions. Past performance does not guarantee future results. This blog does not offer financial services or maintain any contractual relationship with its readers.