I want to invest in a dollar based ETF from the UK. How do you do it?


A reader has asked: I want to invest in a dollar-based ETF from the UK. How do you do it?

The answer here is thankfully quite simple, you need a stockbroker that offers access to ETFs.

Thankfully, we have a comparison table of stockbrokers that provide access to ETFs here.

In order to. buy USD ETFs in the UK you will need to:

  1. Open an account with a stockbroker that offers ETFs
  2. Deposit funds in either GBP or USD
  3. Choose which ETF you want to buy

There are a couple of things to be mindful of though.

There are costs for converting GBP into USD.

Some brokers do conversions at the mid-rate, others charge a percentage of the transaction about. Around 0.5% is fair for a small transaction. But if you are converting or buying more than £10,000 of this ETF it may be worth using a currency broker to convert your GBP into USD beforehand then sending the USD to your broker instead of getting them to do the conversion.

However, take into account that converting funds externally will take time, maybe a few days. So you will have to weigh up how price sensitive you are about what is more important.

You will have USD currency exposure to consider

Most people don’t think about this but, if you buy a USD denominated  ETF and the USD and the USD is devalued against the GBP, you are going to lose out. So, for example, if USD is worth 10% less than GBP after you have held the USD based ETF for a month and the price has gone up by 5%. If you were to sell, you would actually be down 5%, rather than up 5%.

However, as many fund managers will tell you in the great debate over active versus passive investing for the long term isn’t about market timing, it’s about long term capital growth.

Compare Vetted Investing, Trading & Currency Accounts

Investing AccountsTrading PlatformsCurrency Transfers
Compare Investment Accounts

Compare Investment Accounts

Compare Trading Platforms

Compare Trading Platforms

Compare Currency Brokers

Compare Currency Brokers

Trading Risk Warning

ALL INVESTING INVOLVES RISK. Investing, Derivatives, Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
ESMA & FCA Risk Warning – “CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 68-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Capital at risk”

Investment Advice Disclaimer

ALL INVESTING CONTAIN RISK: The information contained in this website is for informational purposes only and does not constitute financial advice. The material does not contain (and should not be construed as containing) investment advice or an investment recommendation, or, an offer of or solicitation for, a transaction in any financial instrument. Always seeking independent financial advice.