Our pick for international stock trading: Interactive Brokers
- $0 stock trade fee
- Access to 150 global markets
- Margin lending rates of 3.58% to 4.58% (with IBKR Pro)
If you want to diversify your portfolio with international stocks, you may want to invest in the FTSE 100. This index features the 100 largest companies in the UK, and you can invest in the FTSE 100 from the US in several ways. Keep reading to find out how.
If you want to trade FTSE 100 stocks, ETFs and mutual funds, you’ll need to open an account with an international stock broker. Here’s what you need to do to get started:
The Financial Times Stock Exchange 100 (FTSE 100), informally known as the Footsie, is a stock market index that tracks the 100 largest companies on the London Stock Exchange. It was created in 1984 and is maintained by the FTSE Group, a data services firm also responsible for the FTSE 250, the FTSE 350 and the FTSE All-Share. Big names in the FTSE 100 include some of the largest companies in the world, such as Barclays, Experian, GlaxoSmithKline, HSBC, Rolls Royce, Tesco and Unilever.
The first option is to invest in stocks featured in the FTSE 100 index. This allows you to assess the value of each stock in the index before deciding whether to invest, so you can tailor a portfolio to suit your investment goals.
To trade FTSE 100 stocks, you’ll need a brokerage account that allows you to buy and sell international securities — specifically, you need a broker that lets you trade on the London Stock Exchange.
Investing in individual companies is a good choice if you know how to pick stocks, but it does have its downsides. Researching stocks takes time and effort, two things many of us can’t afford, and it also means paying brokerage fees on each individual trade.
FTSE 100 ETFs invest in a basket of stocks listed in the index. Most are index funds, which aim to mimic the performance of the FTSE 100, but other ETFs also invest in FTSE 100 companies — for example, they may invest in dividend stocks or aim to outperform the FTSE 100.
You can trade shares in ETFs on stock exchanges the same way that you buy and sell individual stocks, so you’ll need to find a broker that offers access to international markets.
The biggest benefit of an FTSE 100 ETF is diversification. With one trade, you can invest in a diverse range of blue-chip companies, plus have the flexibility to buy or sell at any time during trading hours. Many brokers also offer $0 commission on ETF trades, and management fees are less than those of mutual funds.
But while investing in an ETF is generally less risky than buying individual stocks, the ETF won’t be able to match the performance of the best stocks in the FTSE 100.
Mutual funds are professionally managed investments that pool together investor money. Some funds are designed to track the performance of the FTSE 100 by investing in companies featured in the index. Mutual funds are available through brokers, or you can purchase directly from the fund manager.
Some mutual funds are actively managed to try and outperform the FTSE 100, while others are passive funds. However, they have higher management fees than ETFs and can only be traded outside market hours.
If your broker only offers access to US stock exchanges, you can invest in the FTSE 100 with ADRs: shares of large British companies traded on the New York Stock Exchange, American Stock Exchange and the Nasdaq. ADRs are held by US banks and are priced and pay dividends in USD.
ADRs are easy to access for new investors, while trading in USD removes the cost and hassle of currency conversions. However, only a limited range of ADRs is available, while double taxation is also a risk.
You don’t necessarily need an international brokerage account to invest in the FTSE 100. You can also buy ADRs on US stock exchanges through a wide range of trading platforms.
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Most FTSE 100 ETFs are index funds designed to closely track the performance of the FTSE 100. For example, if the FTSE 100 increases in value by 2%, your ETF should also increase by approximately 2%.
To invest in an ETF, you’ll generally need to pay a fee of 0.07% to 2.5% each year, as well as any trading commissions your broker charges.
No ETFs on US exchanges track the full FTSE 100. You’ll need an international brokerage account to purchase FTSE 100-tracking ETFs from UK markets.
Most FTSE 100 ETFs are weighted in favor of companies with higher market capitalization. However, some ETFs invest in each company in the index equally. This means the performance of smaller companies will have a larger impact on the ETF, relative to their size.
There are a couple of other types of ETFs to be aware of:
Check out the table below for a list of some popular ETFs that track the FTSE 100.
Fund | Currency | Ticker | Fee (TER p.a.) |
---|---|---|---|
HSBC FTSE 100 UCITS ETF GBP | GBP | HUKX | 0.07% |
iShares Core FTSE 100 UCITS ETF (Dist) | GBP | ISF | 0.07% |
iShares Core FTSE 100 UCITS ETF GBP (Acc) | GBP | CUKX | 0.07% |
Invesco FTSE 100 UCITS ETF | GBP | S100 | 0.09% |
Xtrackers FTSE 100 UCITS ETF 1C | GBP | XDUK | 0.09% |
Xtrackers FTSE 100 UCITS ETF Income 1D | GBP | XUKX | 0.09% |
Vanguard FTSE 100 UCITS ETF (GBP) Accumulating | GBP | VUKG | 0.09% |
Vanguard FTSE 100 UCITS ETF Distributing | GBP | VUKE | 0.09% |
Lyxor FTSE 100 UCITS ETF C-GBP | GBP | L100 | 0.14% |
Lyxor FTSE 100 UCITS ETF D-GBP | GBP | 100D | 0.14% |
UBS ETF (LU) FTSE 100 UCITS ETF (GBP) A-dis | GBP | UB03 | 0.20% |
There are several good reasons why you should consider investing in the FTSE 100:
Just like any type of investment, trading the FTSE 100 also comes with a variety of risks:
Here’s what happens to your securities if your brokerage fails, and how your assets are protected by SIPC and FDIC.
Read more…Several ETFs have exposure to Silicon Valley Bank, but it appears minimal.
Read more…Treasury Bills are fixed-income assets with maturities of less than one year. Here’s what to know before investing.
Read more…Everything we know about the Discord IPO, plus information on how to buy in.
We’ve pulled a list together of the meme stocks being mentioned most on Reddit in the past 24 hours.
Steps to owning and managing TOTA, with 24-hour and historical pricing before you buy.
Steps to owning and managing TOT, with 24-hour and historical pricing before you buy.
Steps to owning and managing THBR, with 24-hour and historical pricing before you buy.
Steps to owning and managing SBE, with 24-hour and historical pricing before you buy.
Steps to owning and managing TEF, with 24-hour and historical pricing before you buy.
Steps to owning and managing PSACU, with 24-hour and historical pricing before you buy.
Steps to owning and managing DNK, with 24-hour and historical pricing before you buy.
Steps to owning and managing IPHA, with 24-hour and historical pricing before you buy.