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

The Vanguard S&P 500 ETF (VOO) offers investors a simple way to diversify across the U.S. stock market.

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

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

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

VOO, 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 VOO 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, VOO 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 VOO?

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

What are CFDs?

CFDs are financial instruments that enable traders to take positions on price changes in an underlying asset, like the S&P 500, 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.

Another option is investing in other ETFs replicating the same underlying index as VOO, the S&P500. These ETFs are designed to track the performance of the S&P500, providing similar exposure to the index without needing to invest directly in VOO.

How to buy VOO ETF CFD on eToro

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

a) Search for VOO ETF CFD:

• In the eToro search bar, type “VOO” or “Vanguard S&P 500 ETF.”
• Select the VOO ETF CFD instrument from the search results.

b) Open a trade:

Click the “Trade” button on the VOO CFD instrument page. It will open the order window.

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.

d) Execute the trade:

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

Best VOO alternatives for European and UK investors

There’s no need to worry for EU and UK investors seeking exposure to the S&P 500 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 U.S. market’s potential. These UCITS-compliant funds provide diversified exposure to the 500 largest U.S. companies, all within your region’s regulatory framework.

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.

European equivalent ETFs of VOO (€EUR)

In Europe, one of the most popular equivalents of the VOO ETF 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:

UK equivalent ETFs of VOO (£GBP)

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

How to buy VOO alternative (SXR8) on Trading 212

If you’re looking to invest in an alternative to the VOO ETF in EUR, the iShares Core S&P 500 UCITS ETF (SXR8) is a great option, as it is the ETF in EUR with the largest amount of investment. Below are the steps to purchase the SXR8 ETF on Trading 212:

a) Search for SXR8 and select it:

• In the Trading 212 app, type “SXR8” in the search bar.
• Select the iShares Core S&P 500 UCITS ETF from the search results.

b) Review the ETF details:

• You can review the details about the SXR8 ETF, including the expense ratio, assets under management (AUM), and dividend frequency.

c) Open a trade:

• Click the “Buy” button on the SXR8 ETF page to open the order window.

d) Set trade parameters:

• Enter the number of shares you wish to purchase. Alternatively, you can choose to invest a specific amount of money. You can also set additional parameters such as market, limit, or stop orders as needed.

Note: If you invest an amount less than €531.20 (as shown in the example described in the image), it will result in a fractional share. Note that fractional shares on Trading 212 are handled through derivatives (CFDs).

Fractional shares cannot be traded on public exchanges and are illiquid and unrecognised outside the Trading 212 platform. You can only liquidate them by selling through Trading 212, and they cannot be transferred to another broker unless sold.

You can find more information on the Trading 212 website.

e) Execute the trade:

• Review your order details to ensure everything is correct. Click “Send buy order” to execute your purchase.

By following these steps, you can easily invest in the iShares Core S&P 500 UCITS ETF (SXR8) on Trading 212, gaining exposure to the S&P 500 index within a regulated framework suitable for European investors.

What to look for in an S&P 500 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 Total Expense Ratio (TER) or Ongoing Charges Figure (OCF), as is the case with Vanguard.

Taking the Vanguard S&P 500 UCITS ETF (VUAA) fact sheet as an example, you can verify the OCF is 0.07%, which helps keep costs low and can result in higher net returns over time:

b) Replication method

ETFs can use different methods to replicate the performance of the S&P 500 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 Vanguard S&P 500 UCITS ETF (VUAA) uses physical replication, holding the actual stocks of the S&P 500 index, which is generally preferred for its straightforward approach and transparency:

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 Vanguard S&P 500 UCITS ETF (VUAA) is an accumulating ETF:

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.

VUAA has a Total Assets of $52.07 billion:

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 VOO isn’t directly accessible to European and UK investors due to regulatory constraints, many alternative ETFs offer similar exposure to the S&P 500. 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, VOO is quoted in USD, so it might make sense for you to invest in an equivalent ETF quoted in your base currency, in order to avoid currency conversion fees, as well as currency risk.

For European investors, options such as the SXR8 and VUAA provide benefits similar to those of VOO within a compliant regulatory framework. British investors can access alternatives like the CSP1 and VUSA.

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 VOO in Europe and the UK.

Best of luck with your investments!