How to Buy US ETFs as a European with PRIIPs Regulation (2024)

FAQs

How to Buy US ETFs as a European with PRIIPs Regulation? ›

Under the PRIIPs regulation, you cannot trade US-registered ETFs while in Europe because US-registered ETFs do not contain a key information document (KID). The KID contains the details of the investment such as risk, cost, etc. This key information document gives the investor complete information about the investment.

Unfortunately, it is very hard for EU retail traders and investors to buy US-domiciled ETFs. Very few can be classified as “professional”. This means that EU retail traders and investors can't trade US-domiciled ETFs. You can buy very risky single stocks, but not a less risky group of stocks like an ETF.

The reason why US-domiciled ETFs are not available for European investors can be summed up in one word: compliance. To be allowed on EU markets, US-domiciled ETFs (exchange-traded funds) are required to produce documentation according to standards prescribed by MiFID, the EU's legal framework for securities trading.

Most popular non-US domiciled ETFs can be purchased on the London Stock Exchange and the Euronext exchange, so you will need to find a broker that offers the appropriate exchanges. Interactive Brokers is a popular choice for many, but be aware that it is US based.

The QQQ is only available to investors based in the United States, but in this blog post, we will be looking at your options for investing in an ETF that also tracks the Nasdaq 100 Index.

As a European, you are perfectly eligible to invest in the wide range of Vanguard ETFs available on the market. Yep, you may buy an ETF tracking the S&P 500, DAX, or any other of the leading indices! You have a range of 45+ Vanguard ETFs to choose from. Keep in mind that all these ETFs are EU-domiciled.

There is no citizenship requirement for owning stocks of American companies. While U.S. investment securities are regulated by U.S. law, there are no specific provisions that forbid individuals who are not citizens of the U.S. from participating in the U.S. stock market.

In Europe, an ETF may be established as a UCITS or an AIF however the majority of ETFs have been set up under the UCITS regime. UCITS ETFs benefit from the high level of acceptance of the UCITS framework by regulators worldwide due to the investment rules, investor protections and risk management safeguards.

There are a couple different ways non-U.S. investors can open an international brokerage account. You could open an account with a financial services company in your country of residence that offers access to U.S. stocks. Or, you might open a brokerage account for non-U.S. residents with a U.S.-based broker.

The world's most actively traded ETF – based on the NASDAQ-100 index and known by its ticker QQQ – is now available in Europe. The Nasdaq stock market said it has registered the NASDAQ-100 European Tracker – EQQQ — for sale in the UK, Belgium and Ireland. The ETF is designed to follow the NASDAQ-100 index.

How to invest in S&P 500 from Europe? ›

You can't directly invest in the S&P 500 because it's an index, but you can invest in one of the many funds that use it as a benchmark and follow its composition and performance. As a Belgian investor, you can buy shares in an ETF (Exchange Traded Fund) that tracks the performance of the S&P 500.

As an investor, we cannot invest directly in the S&P500 index. Instead, the easiest way to invest in the S&P500 index is through investing in the S&P500 Exchange-Traded Funds (ETFs). An ETF is an instrument that mirrors the performance of an underlying index. Similar to stocks, ETFs are also traded in the stock market.

Please note: You need to be a U.S. citizen with a U.S. mailing address to open an account. If you live or work outside the U.S., please check out our international site.

TQQQ options are available in both European and American style. European style options can only be exercised on the expiration date, while American style options can be exercised any time before the expiration date.

The largest Europe ETF is the Vanguard FTSE Europe ETF VGK with $18.30B in assets. In the last trailing year, the best-performing Europe ETF was TUR at 61.30%. The most recent ETF launched in the Europe space was the First Trust IPOX Europe Equity Opportunities ETF FPXE on 10/04/18.

Due to its broad market exposure, the STOXX Europe 600 index is often quoted as the European equivalent of the U.S. focused S&P 500 index.

It is, however, impossible to directly buy the S&P 500 index. What you can do is invest in the S&P 500 through an instrument replicating every movement of the S&P 500, like an Exchange Traded Fund (ETF). The table below shows the five biggest S&P 500 ETFs available to Europeans.

The closest UCITS equivalent to VTI ETF is Vanguard S&P 500 UCITS ETF, with accumulating share classes in GBP and EUR, and distributing share classes in GBP, EUR and CHF. Vanguard S&P 500 Vanguard excludes Small and some Mid-Caps.

No. Unfortunately, we do not open accounts for any new customers residing outside the United States.

Can I invest in US stocks from Germany? ›

Stocks and bonds are regulated by US law, yet, you do not have to be a US citizen to trade in the US stock market; in other words, you may buy US shares being a citizen of Germany.

TD Ameritrade opens accounts to residents of over 100 countries. The few exceptions include the European Union, Canada, and Australia, but “there are lots of buts and ifs on it”. 2. Interactive Brokers opens accounts to residents anywhere.

The PRIIPs Regulation is the first to deal with pre-contractual information in the form of key information documents (KIDs). These documents have to be provided by those producing or selling investment products to consumers.

ETFs are a type of exchange-traded investment product that must register with the SEC under the 1940 Act as either an open-end investment company (generally known as “funds”) or a unit investment trust.

Account Features for U.S. Expatriates

As a U.S. citizen living abroad, you'll enjoy a number of advantages with Schwab, including: Convenient access to your money through U.S. dollar–denominated checks, debit cards, and the Schwab MoneyLink^® Electronic Funds Transfer Service.

Yes, a US citizen residing abroad can open a Vanguard brokerage account, as long as they meet Vanguard's eligibility requirements.

If you are a nonresident alien, generally you will not have to pay U.S. capital gains tax on your investment earnings. If you are a resident alien, generally, you will be subject to the same capital gains tax as U.S. citizens. Consult with a tax advisor for any assistance you may need.

What are the best ETF bonds in Europe? ›

The best European treasury bond exchange-traded funds (ETFs) are FLIA, ISHG, and BWZ. The top holdings of these ETFs are German bunds, bonds issued by the government of Sweden, and bonds issued by the government of Japan, respectively.

iShares Core S&P 500 Accumulating (IE00B5BMR087)

This fund is the largest S&P 500 ETF available in Europe! ✅ Distribution of dividends. The fund is accumulating, meaning dividends are directly reinvested and no 30% tax on dividends needs to be paid.

The S&P International 700 measures the non-U.S. component of the global equity market through an index that is designed to be highly liquid and efficient to replicate. The index covers all regions included in the S&P Global 1200 except for the U.S., which is represented by the S&P 500®.

Introduction - The S&P 500 has Global Exposure

The S&P 500 is widely considered to be one of the best single gauges for the U.S. equity market. Composed of 500 companies that are domiciled in the U.S., the index captures approximately 82%1 of the total U.S. equity market value.

When most people think about average market returns, those are the commonly cited numbers that they expect to achieve. At an 8% rate of return, $100,000 would turn into $1,000,000 after 30 years. If you have 30 years and $100,000, then there's a good chance that the S&P 500 can make you a millionaire retiree.

Which stocks are available for purchase through Schwab Stock Slices? The shares available for purchase through Schwab Stock Slices are those in the S&P 500 Index (S&P 500), which includes the 500 leading large-cap U.S. publicly traded companies.

Vanguard is paid by the funds to provide administration and other services. If Vanguard ever did go bankrupt, the funds would not be affected and would simply hire another firm to provide these services.

Bottom Line. Overall, Vanguard and Fidelity are both great choices for those interested in investing. They offer a wide range of investment options, low costs, and hands-off or active management depending on your preference. When it comes to index funds, Vanguard is hard to beat, with hundreds of low-cost options.

American Funds come with both front-end and back-end loads and the fees are higher compared to Vanguard's, which offers no-load funds. The Vanguard Group's offerings are passively-managed while American Funds has managers who actively manage its funds.

Cons of TQQQ

In general, QQQ is appropriate for investors who want a large-cap growth stock ETF that can potentially outperform the S&P 500 in the long run. TQQQ is appropriate for investors with a high tolerance for risk and for short-term investment periods.

Are VXX options American or European? ›

The VXX options have American style exercise rather than the VIX option's European style exercise. The European style exercise is necessary on the VIX options because the VIX options and VIX index are only guaranteed to be near each other once—at the expiration time.

European Options have a lower risk since the expiration date is fixed, and the loss or profit can be estimated. American options have a higher risk since the option holder of an American option has the right to exercise the Option at any time they find it profitable.

The EU MiFiD regulation prohibits brokerage firms to sell funds to European retail investors, which do not provide certain regulatory documents, such as a Key Information Document (KID). Notably, differences in US and EU regulation make it impossible for US-ETFs to provide such documents.

The Vanguard 500 Index Fund Admiral Class (VFIAX) and the SPDR S&P 500 ETF (SPY) are similar investment products. Both track the S&P 500, a U.S. stock index comprising 500 companies with the largest market capitalizations.

You can buy shares in US-listed companies from the UK, but due to local and European regulations, you're not allowed to purchase US-listed exchange-traded funds (ETFs) in the UK.

ETFs aim to closely track the performance of an index or asset class, and provide the returns of that index or asset class – less any fees. International ETFs enable you to invest in overseas markets and sectors by tracking a particular index.

Can I buy US ETFs in Switzerland? ›

However, Switzerland is not part of the European Union. Therefore, Swiss investors still have access to U.S. ETFs.

Investors will pay income tax on any dividends that are paid by the ETF but unless an offshore ETF has UK reporting status for the entire period that the investor holds it, any gain on that ETF will be taxed as income instead of capital gains.

You can't directly invest in the S&P 500 because it's an index, but you can invest in one of the many funds that use it as a benchmark and follow its composition and performance. As a Belgian investor, you can buy shares in an ETF (Exchange Traded Fund) that tracks the performance of the S&P 500.

VXUS - Vanguard Total International Stock ETF | Vanguard Advisors.

Since the S&P 500 is only an index, you cannot directly invest in it. You could track the index yourself by buying all the companies from it. However, this would be highly inefficient and almost impossible unless your net worth is quite big.