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

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Fact checked by
Franklin Silva
Updated
Jun 25, 2024

The Vanguard Total Stock Market ETF (VTI) offers investors a simple way to diversify across the U.S. stock market.

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

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

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

VTI, 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 VTI 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, VTI 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 VTI?

Investors in Europe and the UK looking to gain exposure to VTI have some alternatives available. One is through Contracts for Difference (CFDs) on platforms like eToro. CFDs allow you to speculate on VTI’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 CRSP US Total Market 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 VTI (the CRSP US Total Market Index), another option is to consider alternative ETFs that track similar indices, providing broad exposure to the US stock market.

How to buy VTI ETF CFD on eToro

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

a) Search for VTI ETF CFD:

  • In the eToro search bar, type “VTI” or “Vanguard Total Stock Market ETF“.
  • Select the VTI ETF CFD instrument from the search results.
eToro search bar - VTI ETF CFD

b) Open a trade:

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

Best VTI 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 VTI tracks the CRSP US Total Market Index directly, covering large-, mid-, and small-cap equities in the US, there are UCITS-compliant funds in Europe and the UK that provide diversified exposure to similar categories of equities across growth and value styles.

At this point, you have several alternatives:

  1. Buy an ETF that replicates the S&P 500, as this index covers approximately 80% of the available US market capitalization. This is similar to the VTI ETF, which covers the entire US market;
  2. Allocate a percentage of your investment to an ETF that replicates the S&P 500 (large caps) and another percentage to ETFs focused on mid- and small-cap stocks;
  3. For even greater diversification, you can consider ETFs like IWDA or VWCE, which are “All World” ETFs providing exposure to global equities across both developed and emerging markets. These ETFs track indices such as the MSCI World Index (IWDA) or the FTSE All-World Index (VWCE), which cover a broad spectrum of the global stock market.

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.

VTI Alternative ETFs in Europe (€EUR)

In Europe, one of the most popular VTI ETF equivalents is the SXR8 ETF, as it has the largest fund size. Below is a table with some of the leading European ETFs based on data from justETF.com:

VTI Alternative ETFs in the UK (£GBP)

In Europe, one of the most popular VTI ETF equivalents is the CSP1 ETF, as it has the largest fund size. Below is a table with some of the leading European ETFs based on data from justETF.com:

How to buy VTI UK alternative (CSP1) on DEGIRO

If you’re looking to invest in an alternative to the VTI ETF in GBP, the iShares Core S&P 500 UCITS ETF (CSP1) is a great option, as it is the ETF in GBP with the largest amount of investment. Below are the steps to purchase the CSP1 ETF on DEGIRO:

a) Search for CSP1 and select it:

  • In the DEGIRO app, type “CSP1” in the search bar.
  • Select the iShares Core S&P 500 UCITS ETF from the search results.
DEGIRO mobile app - Search bar CSP1 ETF

b) Open a trade:

  • Click the “Buy” button on the CSP1 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 iShares Core S&P 500 UCITS ETF (CSP1) on DEGIRO, gaining exposure to the S&P 500 index within a regulated framework suitable for European investors.

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

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) or Total Expense Ratio (TER), as is the case with iShares by BlackRock.

Taking the iShares Core MSCI World UCITS ETF (SWDA) fact sheet as an example, you can verify the TER is 0.20%:

iShares Core MSCI World UCITS ETF (SWDA) - 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 iShares Core MSCI World UCITS ETF (SWDA) uses physical replication, holding the actual stocks of the S&P 500 Index, which is generally preferred for its straightforward approach and transparency:

iShares Core MSCI World UCITS ETF (SWDA) - 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 iShares Core MSCI World UCITS ETF (SWDA) is an accumulating ETF:

iShares Core MSCI World UCITS ETF (SWDA) - 2024 fact sheet

d) Size

The overall size of the ETF, measured by Total Assets, 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.

SWDA has a Net Asset Value of $74,115.63 million:

iShares Core MSCI World UCITS ETF (SWDA) - 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 VTI 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, VTI 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 SXR8 and IWDA provide benefits similar to those of VTI within a compliant regulatory framework. British investors can access alternatives like the CSP1 and SWDA.

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 VTI in Europe and the UK.

Best of luck with your investments!

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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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