The Complete Guide to VUSA (Vanguards S and P 500 Index ETF)
Information is accurate as of 7/9/2025.
In this post I share everything you need to know about Vanguard’s VUSA ETF, the UK-listed S&P 500 tracker. Learn what it is, what’s inside it, how it’s performed, and where to invest in it, all explained in simple terms.
What Is an ETF?
Before diving into VUSA itself, let’s quickly cover what an ETF actually is.
An ETF, or Exchange-Traded Fund, is an investment that lets you buy a whole basket of companies through one single trade.
When you buy an individual stock like Apple, you own just that one company. But when you invest in an ETF, you get exposure to hundreds (or even thousands) of companies at once.
This diversification means your risk is spread out across many businesses which is one reason ETFs have become such a popular, low-cost way to invest.
What Is VUSA?
VUSA is Vanguard’s S&P 500 ETF, one of the most popular ETFs for UK investors. It aims to mirror the performance of the S&P 500 Index, which represents 500 of the largest publicly traded companies in the US.
That means when you buy VUSA, you’re effectively investing in some of the biggest names in the world , companies you probably use every single day.
The goal of VUSA is simple: to give you the same returns as the S&P 500, without needing to buy all 500 individual stocks yourself.
Key Facts About VUSA
Fund Name: Vanguard S&P 500 UCITS ETF (VUSA)
Index Tracked: S&P 500
Number of Holdings : 504 companies
Ongoing Charge (OCF) : 0.07%
Dividend Yield: 1.04% (paid quarterly)
Fund Type: Income (pays out dividends)
VUSA is one of the lowest cost ETFs available, with an annual fee of just 0.07%, far cheaper than actively managed funds.
VUSA vs VUAG: Income or Accumulation
VUSA is an income ETF, which means any dividends are paid out in cash to your account each quarter.
If you prefer your dividends to be automatically reinvested, Vanguard offers an alternative version called VUAG (the accumulation version).
Both track the same index, the only difference is whether you want your dividends paid out or reinvested.
In short:
VUSA → pays cash dividends.
VUAG → automatically reinvests dividends.
There’s no right or wrong choice , it depends on your investing style.
What’s Inside VUSA?
Since VUSA tracks the S&P 500, all its holdings are US-based companies. Sector-wise, the ETF is dominated by information technology, which makes up roughly 31% of the fund.
Other major sectors include:
Financials
Consumer Discretionary
Healthcare
Industrials
Some of the top holdings include:
Microsoft
Apple
Nvidia
Amazon
Meta Platforms
Tesla
VUSA Historical Performance
Remember: past performance isn’t a guarantee of future results. But it’s still useful to see how the fund has done historically.
Over the last few years, VUSA has delivered strong long-term returns in line with the S&P 500.
Since inception, the fund has returned around 13.9% per year on average.
1-year range: £73.95 (low) to £93.81 (high).
While there have been short-term dips during market corrections, the long-term trend has been very positive, consistent with the performance of large US companies.
Is VUSA a Low-Risk Investment?
While no stock market investment is completely risk-free, VUSA is generally considered a low-to-moderate risk option compared to investing in individual shares.
Because it’s diversified across hundreds of companies and industries, it reduces the impact of any one company underperforming.
However, since it’s 100% US-focused, it still carries currency risk (GBP/USD fluctuations) for UK investors, and performance will depend on the overall US economy and market conditions.
Where to Buy VUSA in the UK
You don’t need to go directly through Vanguard to buy VUSA, it’s available on most UK investment platforms.
My recommendation for beginners is to look at Trading 212. You can check it out for free here and if you sign up and deposit just £1, you will receive a free fractional share worth up to £100. (T’s & C’s apply, Capital at Risk)
It’s the same ETF across all platforms, the main differences are fees, app usability, and available account types.
Tip: Always invest within a Stocks and Shares ISA if you can. This protects your investment gains from UK tax, and all major brokers above support ISAs.
Final Thoughts
That’s your complete guide to Vanguard’s VUSA ETF.
It’s simple, cheap, and gives you instant access to some of the biggest and most profitable companies in the world.
With its low fees, quarterly dividends, and long-term performance record, VUSA has become a favourite among UK investors looking for reliable US exposure.
Just remember, always do your own research, and consider your risk tolerance and investment goals before investing.
This is NOT financial advice. This content is for educational and entertainment purposes only. Investing involves risk, and your capital is at risk. Past performance is not a guarantee of future results. The information in this blog was accurate at the time of posting.
