Please remember, investment value can go up or down and you could get back less than you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling.
Why invest in US shares?
Some things are just too large to ignore and in investment terms, the US certainly falls into that category.
It is estimated that US markets account for around 55% of the world’s total (by way of comparison, the UK market represents about 4%).
It is astonishing to consider how US brands have become entrenched in our daily lives.
This might be in terms of leisure time (Netflix, Disney+), mealtimes (McDonalds), morning times (Starbucks) or indeed any time (Google, Amazon, Apple, Facebook).
US investing was traditionally most easily achieved indirectly in the UK – for example, within the FTSE100 an estimated 70% of earnings come from overseas and it was therefore possible to gain some exposure through this channel.
In addition, overseas investment was held back by “home bias”, that is the tendency to invest in one’s own country, usually because of familiarity.
Apart from overseas investment now being easily accessible, there is also the world of Exchange Traded Funds, or ETFs, which these days means that an investor can slice and dice investments in many ways, such as by index, by country, by sector or by region.
In addition, there are other compelling reasons to be taking a global view. Quite apart from different economies moving at different speeds at any given time, the generally accepted wisdom of diversification does not just apply to sectors, but to geographies as well.
About the US stock market
The New York Stock Exchange and the NASDAQ are the largest stock exchanges in the world with a market capitalisation of over US$25 trillion and US$19 trillion respectively (Feb 2021).
The main US stock indices – the Dow Jones, S&P 500 and Russell 2000 – all feature stocks listed on both exchanges. Whereas the NASDAQ Composite and NASDAQ 100 only feature companies listed on the NASDAQ.
Both the NYSE and NASDAQ are open from 9:30 am to 4:00 pm Eastern Time (2:30 pm to 9:00 pm GMT).
How to buy US shares with ii
To trade US shares with ii, start by opening an account.
Once you're logged in, select ‘trade now’ and ‘international’ to search for the shares you want to invest in. You will be prompted to sign Exchange Agreements – this gives you access to live international share pricing.
If you wish to invest in US shares, you need to complete a W-8BEN form once every three years. This US tax document allows UK residents to reduce the amount of tax paid on US dividends. You can find this form by logging in to your account and selecting the ‘Account’ menu , followed by ‘Useful forms’.
Most popular US shares
Below is a preview of the most purchased shares by ii customers over recent months.
Most purchased shares in H2 2021
|6||AMC Entertainment Holdings|
|8||Palantir Technologies Inc - Class A|
|9||Alibaba Group Holding Ltd ADR|
Source: interactive investor. Note: the top 10 is based on the number of “buys” between 1 July and 31 December 2021.
Fees and charges
- It costs £9.99 a month to join ii, which includes our Stocks and Shares ISA, Trading Account and Junior ISA. Add a SIPP for just £10 a month extra.
- We give you a free trade every month, which can be used to buy and sell US shares.
- Additional US share trades cost £7.99.
- There is a foreign exchange fee of 1.5% when you trade in pounds. This is reduced for transactions over £25,000. You can avoid paying this fee every time you trade by holding foreign currency in your account. Learn more
- If you plan on making a lot of international trades, our Super Investor service plan could save you money in the long run.
News and insights
Please remember: The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The value of international investments may be affected by currency fluctuations which might reduce their value in sterling. We may receive two elements of commission in relation to international dealing - Trading Commission and our FX Charge. Please see our rates and charges for full details of the relevant costs. Foreign markets will involve different risks from the UK markets. In some cases the risks will be greater.