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Is VGT available in Europe & UK? Alternative ETFs (UCITS)

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Fact checked by
Franklin Silva
Updated
Jul 4, 2024

The Vanguard Information Technology ETF (VGT) offers investors a straightforward method to gain diversified exposure to the U.S. technology sector while distributing annual dividends.

However, due to regulatory restrictions, VGT isn’t directly accessible to retail investors in Europe and the UK.

In this article, we will explore the availability of VGT in Europe and the UK, alternative ETFs, and guidance on how to invest in these alternatives.

Why VGT isn’t directly available in Europe & UK?

VGT, a popular US-domiciled ETF, isn’t directly available to European and UK investors due to regulatory constraints under the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation.

This regulation requires that investment products marketed to retail investors in the EU must provide a Key Information Document (KID), which outlines the product’s features, risks, and costs in a standardized format. The PRIIP regulation aims to enhance transparency and protect retail investors by ensuring they have access to transparent and comparable information about investment products.

US-domiciled ETFs like VGT do not produce these KIDs because US regulations do not mandate such disclosures. Consequently, these ETFs do not comply with PRIIPs requirements and are therefore inaccessible to ordinary retail investors on European investment platforms such as eToro, DEGIRO, Interactive Brokers, Trading 212, and Trade Republic.

Furthermore, VGT is quoted in USD, while the European and UK equivalent ETFs are quoted in other currencies, such as the EUR and the GBP (explored below).

For further details, refer to the official documentation of the PRIIPs regulation provided by the European Union here.

Is there any workaround to invest in VGT?

Investors in Europe and the UK looking to gain exposure to VGT have some alternatives available. One is through Contracts for Difference (CFDs) on platforms like eToro. CFDs allow you to speculate on VGT’s price movements without owning the underlying ETF physically. However, this approach comes with significant risks, including higher potential losses if leverage is used.

What are CFDs?

CFDs are financial instruments that enable traders to take positions on price changes in an underlying asset, like the Dow Jones U.S. Dividend 100 Index, without owning it. It contrasts with traditional investing, where ownership of the asset is required. To learn more about the differences between CFDs and investing in real assets, read our article: CFDs vs Shares: Understand the Differences.

Since no ETFs are available in the UK or EU that replicate the exact underlying index of VGT (the MSCI US Investable Market Information Technology 25/50 Index), another option is to consider alternative ETFs that track similar indices, providing broad exposure to the US technology sector for investors seeking regular income distributions.

How to buy VGT ETF CFD on eToro

If you are a European or UK investor and you want to buy the VGT ETF CFD on eToro, you need to:

a) Search for VGT ETF CFD:

  • In the eToro search bar, type “VGT” or “Vanguard Information Technology”.
  • Select the VGT ETF CFD instrument from the search results.
eToro search bar - VGT ETF CFD

b) Open a trade:

  • Click the “Trade” button on the VGT CFD instrument page. It will open the order window.
eToro trade button - VGT ETF CFD

c) Set your trade parameters:

  • Amount or number of shares: Enter the amount of money you want to invest in or the number of shares;
  • Leverage: Choose your desired leverage level (remember, leverage can amplify gains and losses);
  • Stop Loss and Take Profit: Set these optional orders if you want to manage your risk. A stop-loss order automatically closes your trade if the price drops to a certain level, while a take-profit order closes it when the price reaches a specified target.
eToro order entry window - VGT ETF CFD

d) Execute the trade:

  • Carefully review your order details to ensure they are correct.
  • Click the “Buy” button to execute your buy order.
eToro buy button - VGT ETF CFD

Best VGT alternatives for European and UK investors

There’s no need to worry for EU and UK investors seeking exposure to the US stock market without taking on the high risk associated with CFDs.

We’ve compiled a selection of alternative ETFs that offer a secure and regulated way to tap into the US market’s potential while providing dividend distributions. While VGT tracks the MSCI US Investable Market Information Technology 25/50 Index, which measures the performance of large, medium, and small U.S. companies in the information technology sector, there are UCITS-compliant funds in Europe and the UK that provide diversified exposure to technology equities.

VGT is a distributing ETF, and in the tables below, we present various alternatives, including both distributing and accumulating ETFs in the technology sector, similar to VGT’s exposure, so you can choose the option that best suits your investment goals.

The following tables showcase some of the most popular options available for European and UK investors. The first table shows ETFs quoted in Euros, while the second one is in British Pounds.

VGT Alternative ETFs in Europe (€EUR)

In Europe, two of the most popular alternatives to the VGT ETF are the SXRV (accumulating) and EQQQ (distributing) ETFs. Below is a table showcasing some of the leading European ETFs based on data from justETF.com:

VGT Alternative ETFs in the UK (£GBP)

In the UK, two of the most popular VGT ETF alternatives are the CNX1 (accumulating) and EQQQ (distributing) ETFs, as they have the largest fund sizes. Below is a table with some of the leading European ETFs based on data from justETF.com:

How to buy VGT Europe alternative (EQQQ) on DEGIRO

If you’re looking to invest in an alternative to the VGT ETF in EUR, the Invesco EQQQ Nasdaq-100 UCITS ETF (EQQQ is the ticker symbol) is an excellent option. It is the distributing ETF in EUR, similar to the VGT ETF, with the largest fund size.

Investors from the UK would follow the same process, with the only differences being the stock exchange where the ETF is listed (the London Stock Exchange), and the currency of the ETF​ (GBP).

Below are the steps to purchase the EQQQ ETF on DEGIRO in Europe:

a) Search for VGT and select it:

  • In the DEGIRO app, type “EQQQ” in the search bar;
  • Select the “EQQQ NASDAQ-100 UCITS ETF Dist” from the search results.
DEGIRO mobile app - Search bar EQQQ ETF

b) Open a trade:

  • Click the “Buy” button on the EQQQ ETF page to open the order window.
DEGIRO mobile app - Buy button

c) Set trade parameters:

  • Enter the number of shares you wish to purchase. You can also set additional parameters such as market, limit, stop loss, stop limit, and trailing stop orders as needed.
DEGIRO mobile app - Trade parameters

d) Execute the trade:

  • Review your order details to ensure everything is correct. Click “Place Order” to execute your purchase.
DEGIRO mobile app - Place order

By following these steps, you can easily invest in the “EQQQ NASDAQ-100 UCITS ETF Dist” (EQQQ) on DEGIRO, gaining exposure to the Nasdaq-100® index within a regulated framework suitable for European investors.

What to look for in an ETF (in EUR and GBP)?

When evaluating an ETF, it’s crucial to consider several factors to ensure it meets your investment goals and strategy. Here are the key points to keep in mind:

a) Fees

Management fees for ETFs can vary depending on the provider. These fees are often referred to as Ongoing Charges Figure (OCF), Total Expense Ratio (TER) or All-in fee as is the case with Xtrackers by DWS.

Taking the Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) fact sheet as an example, you can verify the All-in fee is 0.12%:

Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) - 2024 fact sheet

b) Replication method

ETFs can use different methods to replicate the performance of the MSCI World index:

  • Physical Replication: This method involves holding the actual securities that comprise the index, providing direct exposure to it, and avoiding the complexities associated with derivatives.
  • Synthetic Replication: This approach uses financial derivatives to replicate index performance, which can be more cost-effective but introduces counterparty risk if the derivative contracts fail.

The Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) uses direct replication, meaning the ETF contains all index components. This is also referred to as physical replication, holding the actual stocks of the MSCI USA Information Technology 20-35 Custom Index, which is generally preferred for its straightforward approach and transparency:

Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) - 2024 fact sheet

c) Use of income

ETFs handle income from underlying assets in different ways:

  • Accumulating ETFs: These ETFs reinvest dividends from the holdings back into the fund, potentially boosting returns through compounding.
  • Distributing ETFs: These ETFs pay out dividends to shareholders periodically, providing a regular income stream but potentially being less tax-efficient in certain jurisdictions.

The best choice depends on your individual preferences and financial goals. An accumulating ETF might be more suitable if you’re focused on long-term growth and reinvesting dividends. A distributing ETF could be a better fit if you need regular income.

The Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) is a distributing ETF that pays dividends annualy:

Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) - 2024 ETF size

d) Size

The Share Class Size, can be a factor to consider. Larger ETFs tend to have higher liquidity, meaning buying and selling shares is easier without significantly impacting the price.

XSTC has a Share Class Size of £1,45 billion:

Xtrackers MSCI USA Information Technology UCITS ETF 1D (XSTC) - 2024 fact sheet

e) Currency

Another important aspect is the currency in which the ETF is denominated. ETFs can be listed in different currencies such as USD, EUR, or GBP. The currency denomination of an ETF can impact your investment in the following ways:

  • Currency exchange risk: If the ETF is denominated in a different currency than your base currency, you may face currency exchange risks. For example, if you are a UK investor and the ETF is denominated in USD, fluctuations in the USD/GBP exchange rate will affect your returns;
  • Transaction costs: Buying an ETF in a currency different from your base currency may involve additional transaction costs due to currency conversion fees;
  • Convenience: Holding an ETF in your local currency (EUR for European investors, GBP for UK investors) can simplify your portfolio management and avoid the need for frequent currency conversions.

f) Currency hedging

Currency hedging can be an important consideration for European and UK investors. Some ETFs offer versions that hedge against fluctuations between the euro or pound and the U.S. dollar.

While hedging can provide stability in the short term, it may also come with additional costs and could potentially reduce long-term returns if the euro or pound strengthens against the dollar.

Looking to backtest your ETF portfolios?

If you are an EU citizen looking to backtest your ETF portfolios, check out our Portfolio Analyser. Our tool allows you to analyze your selected portfolios and obtain visual data and metrics to make informed decisions when comparing and evaluating EU-domiciled ETFs.

Bottom line

In summary, while VGT isn’t directly accessible to European and UK investors due to regulatory constraints, many alternative ETFs offer similar exposure to the US stock market.

These UCITS-compliant funds adhere to EU regulations, ensuring transparency and investor protection. By understanding the specific features of these alternatives, including fees, replication methods, income treatment, currency, and fund size, investors can make well-informed choices that align with their financial goals.

Furthermore, VGT is quoted in USD, so it might make sense for you to invest in an equivalent ETF quoted in your home currency, in order to avoid currency conversion fees, as well as currency risk.

For European investors, options such as the SXRV and EQQQ provide benefits similar to those of VGT within a compliant regulatory framework. British investors can access alternatives like the CNX1 and EQQQ.

Platforms such as Interactive Brokers, DEGIRO, Trading 212, and Trade Republic offer access to these ETFs, making it convenient for EU and UK investors to engage with the U.S. market.

We hope this article has addressed your questions about the availability of VGT in Europe and the UK.

Best of luck with your investments!

FAQs

Is VGT available on DEGIRO?

No, VGT is not available for EU or UK investors on DEGIRO. However, DEGIRO does offer access to equivalent ETFs that track similar indexes and provide comparable investment opportunities.

Is VGT available on eToro?

Yes, VGT is available on eToro, but only through Contracts for Difference (CFDs). This means you can speculate on the price movements of VGT without actually owning the underlying asset. Investors should be aware of the risks associated with trading CFDs, including the potential for significant losses.

Is VGT available on Trade Republic?

No, VGT is not available on Trade Republic. Investors may need to look for alternative ETFs that offer similar exposure and performance metrics within Trade Republic’s offerings.

Is VGT available on Trading 212?

No, VGT is also not available on Trading 212. Investors can explore other ETFs available on the platform that might offer similar benefits and align with their investment strategies.

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About the author
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António Francisco
Broker Analyst

António is a Broker Analyst with a BSc in Finance and Accounting. He is passionate about financial markets and innovative projects.

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