A lot of the portfolio recommendations you come across online are from US-based investors. You’ll see portfolios like VTI and chill, or 80% VTI & 20% VXUS, but as UK investors these funds are not available to us, so what are the UK equivalents of popular US funds?
Why can’t I buy US-based funds in the UK?
First off let’s touch on why you can’t simply buy US funds when you are based in the UK (or Europe).
All funds sold in the UK and Europe need to abide by a regulatory framework called UCITS (Undertakings for Collective Investment in Transferable Securities), which is a European Union regulation. Despite the UK leaving the EU, the FCA has decided to stick with/adopt the framework.
US-based funds have no such UCITS requirements and therefore they don’t meet the regulation and aren’t therefore available in the UK or Europe.
However, this really isn’t much of a problem, except for one or two notable exceptions which I’ll come on to, as there are plenty of UCITS-compliant alternatives available to us.
I’ll go through all the main US funds below and give you their UK equivalents and then I’ll summarise it all in a table at the end.
So, what are the UK equivalents of popular US funds?
VT & VTWAX UK equivalents
VT & VTWAX track the FTSE Global All Cap Index. The perfect match UK equivalent is the Vanguard FTSE Global All Cap Index Fund (VAFTA or VAFTI for the distribution version). So that’s an easy one.
The Vanguard FTSE Global All Cap Index Fund gives you pretty much everything, it invests across all global markets and all market cap sizes.
If you would prefer an ETF rather than a mutual fund then there is no exact UK equivalent but there is the Vanguard FTSE All-World UCITS ETF (VWRP or VWRL for the distribution version). The performance of this fund is very similar to the Vanguard FTSE Global All Cap Index Fund but it excludes small-cap.
VTSAX & VTI UK equivalents
VTSAX & VTI (Vanguard Total Stock Market Index Fund & Vanguard Total Stock Market ETF) track the CRSP US Total Market Index. The only difference between the two is that one is a mutual fund and one is an ETF.
The UK alternative to VTSAX & VTI is another mutual fund, Vanguard US Equity Index Fund (VAUIA or VAUEI). It tracks the Standard and Poor’s Total Market Index but the difference is insignificantly small.
VOO & SPY UK equivalents
Both the Vanguard S&P 500 ETF (VOO) and SPDR S&P 500 ETF (SPY) track the US S&P 500 Index. There are numerous direct equivalents in the UK that also track the S&P 500, namely VUSA, SPXP & CSP1.
VFIAX UK equivalent
VFIAX (Vanguard 500 Index Fund Admiral Shares) is another US fund that simply tracks the S&P 500, so the same UK alternatives as above for VOO & SPY e.g. VUSA, SPXP & CSP1.
QQQ & QQQM UK equivalents
Both Invesco QQQ Trust & Invesco NASDAQ 100 (QQQM) track the NASDAQ 100 index. Again there are numerous UK exact alternatives that also track the same index.
Invesco EQQQ NASDAQ-100 UCITS ETF (EQQQ) & iShares NASDAQ 100 UCITS ETF (CNX1) both track the NASDAQ 100 index, which is comprised of the largest 100 US technology companies.
The iShares S&P 500 IT Sector (IITU) & Invesco US Technology S&P (XLKQ) are also worth a mention here as another possible UK alternative to QQQ. Whilst they invest in the technology-only constituents of the S&P 500 as opposed to the NASDAQ 100, there is not a particularly massive difference but the management fees are less.
VTV UK equivalent
The Vanguard Value Index Fund ETF (VTV) tracks the CRSP US Large Cap Value Index.
The closest UK equivalent I know of is the iShares Edge MSCI USA Value Factor UCITS ETF (IUVL & IUVD), which also tracks US large-cap value.
VBR & AVUV UK equivalents
The Vanguard Small-Cap Value Index Fund (VBR) & Avantis US Small Cap Value ETF (AVUV) are both focused on US Small Cap Value stocks. The former tracks the CRSP US Small Cap Value Index whilst the latter is an actively managed fund.
The SPDR MSCI USA Small Cap Value Fund (USSC) tracks the MSCI USA Small Cap Value Weighted Index, so is a very close UK equivalent to VBR and to some extent AVUV.
VYM UK equivalent
The Vanguard High Dividend Yield ETF tracks the FTSE High Dividend Yield Index is comprised of circa 460 US stocks and has an approximate yield of 3.3%.
There are a few options when it comes to a UK equivalent:
The FTSE All-World High Dividend Yield UCITS ETF (VHYL), tracks the FTSE All-World High Dividend Yield Index which comprises 1,767 stocks. The key difference to note is that VHYL is not 100% US stocks, it’s slightly over 45% US weighted (and because of this the yield is a bit higher at circa 3.8%).
If you specifically want the same US bias as VYM then you could look at the SPDR S&P US Dividend Aristocrats UCITS ETF (USDV) or Fidelity US Quality Income UCITS ETF Acc. Both these funds hold only US stocks but track their own bespoke indices.
SCHD UK equivalent
The Schwab U.S. Dividend Equity ETF (SCHD) tracks the Dow Jones U.S. Dividend 100 Index (which focuses on the quality and sustainability of dividends).
There is no exact UK equivalent of SCHD but the S&P 500 Low Volatility High Dividend Index ETF (HDLV) is a pretty close substitute. As is the WISDOM TREE US EQUITY INCOME UCITS ETF (DHS).
VGT UK equivalent
The Vanguard Information Technology ETF (VGT) tracks the MSCI US Investable Market Information Technology 25/50 Index. This means it invests in large, medium and small US technology stocks. VGT comprises 325 companies.
The 25/50 part in the name means the weight of the largest constituent is constrained to 25% and the weights of all other constituents are constrained to a maximum of 50%
The nearest UK equivalent is Xtrackers MSCI USA Information Technology UCITS ETF (XSTC) which tracks the MSCI USA Information Technology 20/35 Custom index.
The other obvious thing to do is simply buy a Nasdaq 100 tracking fund such as EQQQ or CNX1.
BND UK equivalent
The Vanguard Total Bond Market ETF invests in medium-term investment-grade US bond funds, with circa 60% being US government bonds.
iShares US Aggregate Bond UCITS ETF (IUAA & SUAG) & and SPDR Bloomberg US Aggregate Bond UCITS ETF (USAG) are both similar to BND.
VXUS UK equivalent
The Vanguard Total International Stock Index Fund ETF tracks the FTSE Global All Cap ex US Index, which is basically everything but not including any US stocks.
It is common to see US investors recommending portfolios such as 80% VTI/VOO/SPY and 20% VXUS. What they are doing here is putting 80% of their money in their domestic market and 20% internationally.
Given we are not in the US we are unlikely to want an ex-US fund and therefore there is no UK equivalent of VXUS. In most cases, you would achieve the same % mix by buying a global or world fund (e.g. Vanguard FTSE Global All Cap Index Fund or VWRL which are about 60% US) and then buying a US-specific fund (e.g. Vanguard US Equity) in the appropriate percentages to tilt you more heavily toward the US i.e. to get you to that 80/20 split.
UK EQUIVALENTS of POPULAR US FUNDS TABLE SUMMARY
|VT & VTWAX
|FTSE Global All Cap Index
|Vanguard FTSE Global All Cap Index Fund
|FTSE Global All Cap Index
|VTSAX & VTI
|CRSP US Total Market Index
|Vanguard US Equity Index Fund
|S&P Total Market Index
|VOO & SPY
|Vanguard S&P 500 UCITS ETF
|SPDR S&P 500 ETF
|iShares Core S&P 500 UCITS ETF
|QQQ & QQQM
|Invesco EQQQ NASDAQ-100 UCITS ETF
|iShares NASDAQ 100 UCITS ETF
|CRSP US Large Cap Value
|iShares Edge MSCI USA Value Factor UCITS ETF
|CRSP US Small Cap Value Index
|SPDR MSCI USA Small Cap Value Fund
|MSCI USA Small Cap Value Weighted Index
|iShares US Aggregate Bond UCITS ETF
|SPDR Bloomberg US Aggregate Bond UCITS ETF