VTSAX is a popular Index fund for American Investors. If you watch videos or read books on investing strategies you may have heard of it. VTSAX is an Index fund that tracks the total United States stock market by tracking the performance of the CRSP US Total Market Index.
However, if you’re in the UK and search for this fund on your investing app, you won’t find it. In this article, I’ll explain why it’s not there and show you some alternative funds that are very similar in the UK.
Quick Overview
VTSAX aims to track the CRSP US Total Market Index which includes large, mid, small and micro-cap stocks. Due to regulatory reasons, this ETF is not available in the UK or EU. A similar ETF that also tracks the US total stock market in the UK is VAUIA (Vanguard U.S. Equity Index Fund).
Why Is VTSAX Not Available In The UK?
VTSAX isn’t available to UK or European investors. This is because 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 VTSAX?
VTSAX stands for Vanguard Total Stock Market Index Fund Admiral Shares. It’s a mutual fund managed by Vanguard, and as its name suggests, it aims to provide investors with exposure to the entire U.S. equity market. Here are the key features you’d want to know as an investor:
- Broad Market Exposure: VTSAX tracks the performance of the CRSP US Total Market Index. This index represents virtually all publicly traded U.S. stocks, which means you’re investing in a wide range of small, mid, and large-cap stocks across many industries.
- Low Expense Ratio: One of Vanguard’s hallmarks is its low-cost index funds. VTSAX has a very low expense ratio compared to actively managed funds, which means you pay less in fees, potentially increasing your investment returns over time.
- Diversification: Investing in VTSAX is a way to achieve instant diversification, which can reduce the risk of your investment portfolio compared to investing in individual stocks.
- Passive Management: As an index fund, VTSAX is passively managed. It’s designed to replicate the performance of the index, so there’s less turnover and typically fewer taxable capital gains distributions compared to actively managed funds.
As an investor, it’s important to consider your own investment goals, risk tolerance, and investment horizon when evaluating if VTSAX, or any other investment, is a suitable option for your portfolio.
VTSAX Alternatives In The UK
Now we know what VTSAX 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 VTSAX 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 VTSAX 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 to invest in the total American Stock market from 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, invest in the accumulation units and if you want your dividends paid out in cash, purchase the distribution units.
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