Bloomberg examines how foreign institutions rotate between nearly identical S&P 500 ETFs to avoid the 30% US withholding tax on dividends while maintaining market exposure. The quarterly shuffle moves $40 billion or more between IVV and VOO and likely saved investors about $147 million in US taxes last year.
A $40 Billion ETF Shuffle Helps Foreign Investors Dodge US Taxes
Bloomberg
Zachary Mider, Denitsa Tsekova
Research
12 Pages
Key Takeaways
Dividend tax avoided: Overseas investors switch between IVV and VOO around ex-dividend dates, potentially avoiding 30% withholding tax while retaining S&P 500 exposure.
Billions move quarterly: More than $40 billion can leave IVV each quarter, with most capital entering VOO before the flows reverse days later.
Savings are material: Bloomberg estimates the IVV-VOO rotation saved foreign investors about $147 million in US taxes during 2025.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
