The FAANGs might sound like a new rock band, but they’re actually some of the most successful and well-known tech companies in the world. In fact, it’d be a surprise if you haven’t heard of at least one of them. These are considered to be some of the best tech companies to invest in globally, so if you’re looking into purchasing technology stocks, this is for you.
If you only invest in local stocks and shares then you aren’t diversifying your portfolio as much as you can. As the FAANGs aren’t on any UK stock market, you’d need to buy US stocks to get access to them, which helps to geographically diversify your portfolio (i.e. spread your investments out across the world).
This means that if there’s volatility in the stock market in one country, you’ve still got the stability of other countries’ stock markets to fall back on.
It’s basically making sure your eggs aren’t all in the same basket. Typically, more diversification minimises risk, as it means that if one stock goes down in value then others might go up, and overall you might have a gain.
You can diversify by mixing up:
No, you can’t buy these shares on the London Stock Exchange. These companies are listed on the NASDAQ in the US.
But you don’t have to be in the US to access its stock market. You can purchase shares on NASDAQ through an online investment platform, as long as it offers US stocks, which many of the ones we’ve reviewed do.
If you want, you can also get access to the FAANGs with an exchange-traded fund (ETF).
NASDAQ is the world’s second largest stock exchange, second to the New York Stock Exchange (NYSE) by market capitalisation. It’s home to some of the largest companies in the world.
This is where you can buy shares in Apple (NASDAQ: AAPL), Facebook (NASDAQ: FB), Google (NASDAQ: GOOGL), Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN).
There are three main ways that you can invest in global stocks and shares from the UK, these are:
This method is the most direct way of accessing the FAANGs. You can purchase shares in companies with a broker, typically using an online platform, but not always. Some brokers offer advice, to help you make the best choice with your investments, but they might charge you quite a hefty commission for this. If you don’t want advice, you can go with the DIY option, but like remodelling your kitchen, if you don’t know what you’re doing it could end badly, with you sitting on the kitchen floor eating takeaway pizza and wishing you had paid for a professional.
Online platforms tend to have some great resources and learning tools that can help you do the research on your investments. These sometimes include demo accounts, step-by-step guides and videos, as well as information on the market.
A good way to get access to tech companies is to invest in managed funds. These are designed to save you time and money by pooling your money with that of others and having an investment manager keep track of it. You have to pay a fee for the investment manager, but it can work out cheaper than buying stocks if you reckon you need an adviser.
Funds are divided into loads of different factors, such as the sector (in this case, technology), the location and often the aim (as in, what you want to get from it). Loads of providers have lists of funds and ways to filter them to find what you’re looking for. Make sure you choose a fund that suits what you’re trying to achieve.
ETFs are another option to purchase shares in international companies. They tend to be really cost effective. They’re similar to funds, as they are made up of a group of different shares, but they’re bought and sold on the stock exchange, like shares.
ETFs track an index or a market sector and mirror the returns. You can buy ETFs with most online brokers and investment platforms.
There isn’t a specific FAANGs ETF, but if you were to buy an ETF that tracks the NASDAQ-100 index, then these companies will be included, along with another 95 companies.
It’s really easy to buy FAANG stocks and shares in the UK. Just follow these steps:
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