If you’re anything like me, when you first started investing you heard VTI mentioned a lot. Whether you are watching a YouTube video or are on an investing forum, people are talking about VTI. This is because VTI is a popular US total stock market ETF, in the United States.
However, when you search for VTI on your brokerage account in the UK, it won’t return anything. In this article, I’ll explain why that is and show you some alternatives that are very similar in the UK.
Quick Overview
VTI aims to track approximately 100% of the investable U.S. Stock Market including large, mid, small and micro-cap stocks. Due to regulatory reasons, this ETF is not available in the UK. A similar ETF with the same aim in the UK is VAUIA (Vanguard U.S. Equity Index Fund).
Why Is VTI Not Available In The UK?
Before we take a look at some of the VTI alternatives let’s take a look at why you can’t purchase VTI in the UK.
Funds in the UK & Europe need to abide by a regulatory framework called UCITS (Undertakings for Collective Investment in Transferable Securities). This is a European Union regulation.
When you look at many ETFs in the UK you will see UCITS in the name.
US funds do not have to follow these same regulatory requirements and therefore don’t meet the regulations. This is why they are unavailable in UK markets.
For most funds, there is a UK or EU equivalent fund you can invest in. While it may not be under the exact same name, it has the same goal as its US counterpart.
What Is VTI?
The Vanguard Total Stock Market ETF (VTI) is an exchange-traded fund managed by Vanguard Group, one of the world’s largest investment management companies. VTI aims to provide investors with broad exposure to the entire U.S. stock market, including small-, mid-, and large-cap stocks across both growth and value styles.
Key aspects and aims of VTI include:
- Broad Exposure: It encapsulates the entire U.S. equity market, representing all sectors and industries, and provides diversified exposure to a wide range of companies.
- Low-Cost Investing: Vanguard is known for its low expense ratios, and VTI is no exception, making it an affordable option for investors seeking broad market exposure.
- Passive Management: VTI is designed to track the performance of the CRSP US Total Market Index, which represents virtually all U.S. investable equities, and therefore, it employs a passive management investment approach.
- Diversification: With thousands of holdings, VTI offers robust diversification, mitigating the impact of any single stock’s poor performance on the overall portfolio.
- Long-Term Growth: It’s generally aimed at investors looking for long-term capital growth as it invests in the entire U.S. stock market, which historically has tended to rise in value over long periods.
All this may sound great but it’s not available in the UK, so what are some ETFs Uk investors have access to that have a similar goal.
VTI Alternatives In The UK
Now we know what VTI is, let’s take a look at the equivalent ETF in the UK that also tracks the total US Stock market.
Vanguard US Equity Index
The Vanguard US Equity Index aims to track the Standard and Poor’s Total Market Index. While this isn’t the exact index that VTI tracks, it’s very similar. It holds almost all of the total US stock market with over 3600 holdings.
It has a 0.10% ongoing management charge which is fairly cheap but is still 0.06% higher than the 0.04% fee VTI charges.
This fund has both Accumulation and Income units. Accumulation will re-invest dividends automatically while income will pay out your dividends in cash quarterly.
This fund is also managed by Vanguard which is one of the largest fund management companies in the world.
You may also be interested in our article on the Best Index Funds For UK Investors
Where Can You Buy This Fund?
Many popular brokerages will offer the Vanguard US Equity Index. If your current broker doesn’t offer it you can use Hargreaves Lansdown. They have over 3,000 funds available on their platform including the Vanguard US Equity Index.
If you want a full review on HL you can check out our full review here.
Hargreaves Lansdown is one of the most trusted investment platforms in the UK. They offer amazing customer service with access to someone on the phone at any time. However, these come at a high price in terms of fees.
- Amazing customer service
- Reliable trustworthy brand name
- High fees on stock trading & ETFs
- Less Modern interface than competitors
Final Thoughts
If you are looking for a similar fund to VTI in the UK the Vanguard US Equity Index is a great option to get very similar exposure to the US market. If you want your dividends re-invested, go for the accumulation units and if you want your dividends paid out in cash go for the distribution units.
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