How to buy US ETFs in the UK: investing and trading explained

Why can’t UK investors directly buy most US ETFs?

The restriction is regulatory rather than market-driven.

Under PRIIPs rules, retail investment products must provide a Key Information Document (KID). Many US-domiciled ETFs do not issue a PRIIPs-compliant KID, meaning UK brokers cannot offer them to retail clients.

This does not mean US market exposure is unavailable. It simply means you must access it in a different way. 

If you’re new to exchange-traded funds, that particular trading strategies article provides a useful foundation.

The S&P 500 UK equivalent: what are your options?

A common question is: what is the S&P 500 UK equivalent?

While you may not be able to buy certain US-listed S&P 500 ETFs directly, you can invest in UCITS-compliant ETFs listed in London or Europe that track the same index.

These funds replicate the performance of the S&P 500 but comply with UK regulation. They are widely used by long-term investors seeking exposure to large US companies.

To understand index investing more broadly, see our article on how to invest in index funds.

How to invest in ETFs in the UK

If your goal is simply to buy ETFs that track US markets, the process is relatively straightforward.

Step 1: Choose the type of exposure you want

Are you investing for the long term, or trading shorter-term price movements? This decision determines whether you should use a share dealing account or a leveraged trading product.

For long-term investing, you may prefer a traditional share dealing account.

For shorter-term speculation, you might consider ETF trading using CFDs, which allows you to trade price movements without owning the underlying asset.

Remember that leveraged products carry higher risk and losses can exceed deposits.

Step 2: Select a UCITS ETF

Look for a UK or European-listed ETF that tracks your desired US index, such as:

• S&P 500
• Nasdaq 100
• Dow Jones Industrial Average

These products are often available in sterling and dollar share classes.

Step 3: Consider costs and currency exposure

When investing in US-focused ETFs, you should factor in:

• Platform fees
• Spread and commission
• Ongoing fund charges
• Currency conversion costs
• Exchange-rate risk

Even if you buy a UK-listed ETF, the underlying assets are usually priced in US dollars. Sterling investors are therefore exposed to currency movements.

Examples of widely followed US ETFs

These ETFs have been chosen for their large market capitalisations and popularity among investors. They are not recommendations, and past performance is not an indicator of future results. 

For investors seeking exposure to the US stock market, theVanguard S&P 500 ETF  is one of the most widely traded UCITS funds in Europe. The ETF tracks the S&P 500 index and carries a total expense ratio of around 0.07%, with major holdings including Apple, Microsoft and Nvidia. 

Another commonly traded fund is the iShares Core S&P 500 ETF, which also aims to track the performance of the S&P 500 index. The fund has a total expense ratio of around 0.07% and provides diversified exposure to hundreds of large US companies across sectors such as technology, healthcare and finance. 

For investors looking for more technology-focused exposure, the Invesco Nasdaq 100 ETF tracks the Nasdaq-100 index. It has a total expense ratio of around 0.30%, with top holdings typically including Microsoft, Apple and Alphabet.

Where to buy ETFs

Another common question is where to buy ETFs. 

In the UK, ETFs can typically be purchased through:

• Online share dealing accounts 

• Stocks and shares ISAs*

• Self-invested personal pensions (SIPPs) 

• Trading platforms offering CFD access

The right choice depends on whether you are investing for tax efficiency, retirement planning or short-term trading. 

* Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

IG Trading and Investments and IG Markets Limited provide access through both share dealing accounts and leveraged trading accounts respectively, depending on your objective. 

Investing vs trading US ETFs

It is important to distinguish between owning ETFs and trading their price. 

While trading can provide flexibility, leverage magnifies both gains and losses. It is not suitable for everyone.

Consider our detailed explanation of how leverage works.

Pros and cons of buying US ETFs in the UK

Pros

• Access to leading US companies  - US-focused ETFs provide exposure to many of the world’s largest and most influential businesses, particularly in technology, healthcare and consumer sectors.
• Diversification beyond the UK market - Investing in US indices can reduce reliance on the domestic economy and broaden a portfolio’s geographic spread.
• Wide choice of index-tracking funds  - There are numerous UCITS-compliant ETFs tracking major US benchmarks, offering different fee levels, dividend policies and currency options.

Cons

• Regulatory restrictions on direct purchases  - Most UK retail investors cannot buy US-domiciled ETFs directly due to PRIIPs requirements, which limits product choice.
• Exposure to currency movements - Returns are affected by changes in the pound–dollar exchange rate, even when buying UK-listed funds tracking US assets.
• Ongoing costs and charges - Management fees, platform charges and currency conversion costs can reduce long-term returns.
• Higher risk when using leveraged products - Trading ETFs via derivatives introduces leverage, which can magnify losses and may result in losing more than the initial deposit.

As with all investments, the value of ETFs can fall as well as rise, and you may get back less than you invest.

IG offers a demo account that mirrors live market conditions without the financial risk, however, as soon as you open a live account, all of the associated risks of trading and investing, including losing more than you put in, become applicable. 

Buying US ETFs in the UK summed up 

• Direct access to US-domiciled ETFs is typically restricted for retail investors 
• UCITS ETFs offer a compliant alternative 
• You can buy ETFs through share dealing accounts, ISAs or SIPPs 
• Trading ETFs via CFDs allows short-term speculation but increases risk 
• Currency exposure and costs should always be considered 

Understanding how to buy US ETFs in the UK comes down to choosing the right structure for your goals. Long-term investors often prioritise simplicity and diversification. Active traders may focus on flexibility but must manage risk carefully.