The Vanguard Growth ETF (VUG) tracks the CRSP US Large Cap Growth Index, focusing on companies with strong earnings growth and high price-to-earnings ratios.
However, for long-term Indian investors, VUG carries a critical structural risk: The US Estate Tax. If you hold US-domiciled assets (like VUG) and your portfolio value exceeds $60,000, the US government levies a 40% Estate Tax on the excess amount upon your death. This creates an unnecessary risk that can wipe out nearly half of the wealth intended for your heirs.
This blog gives you all the information you need about the top UCITS alternatives. While there is no direct UCITS ETF that tracks the exact CRSP index, the alternatives below offer highly correlated growth without the risk of the US Estate Tax.
Table of Contents
Why Indians are looking for UCITS alternatives to VUG
Indian investors are shifting to UCITS alternatives because they solve the tax risks and inefficiencies of US ETFs like VUG while providing the exact same exposure.
- Estate Tax Protection: UCITS funds are typically domiciled in Ireland. They are not considered "US-situs" assets, meaning they are 100% exempt from the 40% US Estate Tax.
- Tax Deferral (Accumulation): Unlike VUG, which forces taxable cash dividends on you, many UCITS funds offer "Accumulating" classes that reinvest dividends automatically. This reduces your tax liability in India and defers it until you sell the fund.
To learn more about UCITS ETFs and why Indian investors are choosing them, read our guide on UCITS ETFs.
Popular UCITS Alternatives for VUG
Here are the top three UCITS funds that serve as the best proxies for US Growth.
1. Invesco EQQQ Nasdaq-100 UCITS ETF
While VUG tracks a broader "Large Cap Growth" index, the Nasdaq-100 is the closest widely available proxy in the UCITS market. Historically, the correlation between VUG and the Nasdaq-100 is over high, as both are driven by the same "Magnificent 7" technology stocks.
- Ticker: EQQQ (LSE)
- Total Expense Ratio (TER): 0.30%
- Structure: Distributing (Pays dividends in cash)
- Top Holdings: NVIDIA, Apple, Microsoft, Amazon, Broadcom.
2. iShares S&P 500 Information Technology UCITS ETF
For investors who want a sharper, more concentrated growth bet than VUG, this sector ETF is a powerful alternative. It focuses purely on the Information Technology sector of the S&P 500.
Since VUG is heavily weighted towards tech, this fund captures the primary driver of VUG's performance but removes non-tech growth sectors. It is an Accumulating (Acc) fund, making it tax-efficient for Indians.
- Ticker: IUIT (LSE)
- Total Expense Ratio (TER): 0.15%
- Structure: Accumulating (Reinvests dividends)
- Top Holdings: Apple, Microsoft, NVIDIA, Broadcom, Oracle.
3. Xtrackers MSCI USA UCITS ETF
For investors who prefer a broader approach closer to VUG's Large Cap mandate but without the tech concentration of the Nasdaq, this fund covers the top 85% of the US market.
Its market-cap weighting naturally tilts it heavily towards the growth giants that dominate VUG. It is significantly cheaper than EQQQ and offers a highly efficient Accumulating structure.
- Ticker: XD9U (LSE)
- Total Expense Ratio (TER): 0.07%
- Structure: Accumulating (Reinvests dividends)
- AUM: ~$10.0 Billion USD (as of Jan 2026)
- Top Holdings: NVIDIA, Apple, Microsoft, Amazon, Alphabet.
Invest in UCITS ETFs with Paasa
Paasa is a global investing platform designed for Indian investors. We provide direct access to over 10 global exchanges, including the United States, United Kingdom, Switzerland, Hong Kong, Germany, France, Canada, Netherlands, Japan, and Singapore.
This means you are not restricted to just US ETFs like the QQQ; you can also buy tax-efficient UCITS equivalents using Paasa.
The Compliance Advantage
Paasa makes global investing easy and also removes the compliance friction with a specialized layer built specifically for Indian residents:
- Schedule FA Reporting: Exact reports you need for your Indian tax returns, eliminating the need for manual calculations.
- Tax Filing & Advice: Access to expert tax advice and seamless filing support.
- FEMA & LRS Integration: Guidance on FEMA regulations and LRS limits to ensure compliance.
Paasa also provides access to managed strategies, along with remittance, FEMA and tax advisory.
Disclaimer
This article is intended for information only and does not constitute investment or tax advice. Investing in global markets entails risks, including currency risk, political risk, and market volatility. Please seek advice from qualified financial and tax professionals before acting.
