How to invest in the NYSE from the UK

Want to know how to trade the New York Stock Exchange? Here's what you need to know about the NYSE and how to invest in US stocks listed there.

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George Sweeney, DipFA

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The New York Stock Exchange (often shortened to NYSE) is the world’s largest stock exchange. Investing in stocks on the NYSE doesn’t limit you to companies based in the big apple, it includes firms from all over the US (and sometimes even abroad too).

If you want to invest in companies on the New York Stock Exchange from the UK, there are a few different strategies you can use but there are also some important things to think about before investing stateside.

What is the New York Stock Exchange (NYSE)?

The NYSE was officially created in 1792 following the signing of the “Buttonwood Agreement” by 24 stockbrokers and it’s now located on the infamous Wall Street in New York and it’s the number one spot globally for buying and selling shares in companies.

The New York Stock Exchange is a place where companies can publicly list shares to try and raise money, but it’s also a place where investors can buy or sell shares. New technology means that most of this trading now takes place electronically rather than the old school way of using physical pieces paper to make trades. Sounds prehistoric, I know.

Today, the New York Stock Exchange (NYSE) is owned by a company called “Intercontinental Exchange” that’s actually listed on the NYSE itself (even though it owns and operates the exchange, confusing right?).

Can I invest in the NYSE from the UK?

You can buy US shares from the UK, but the term “investing in the NYSE” is something that confuses investors.

You may want to invest in companies listed on the NYSE or invest in all the companies listed on the NYSE, but you’re probably not looking to invest in the stock exchange itself.

If you don’t want to buy lots of individual stocks (there are around 2,300 companies on the NYSE), and easier way to invest is using an index fundindex fund or exchange-traded fund (ETF). Doing this is a simple and cheap way to invest in some (or all) of the firms on the New York Stock Exchange from the comfort of your own home right here in the UK.

How to invest in the NYSE

  1. Choose a broker or trading platform. When choosing a platform, make sure it gives you access to stocks on the NYSE, or the specific US stocks you want to invest in. Different brokers also have varying fees and features, ideally use one that’s cheap for international investing.
  2. Open a share-trading account. Once you’ve selected a broker or platform, you’ll need to open a trading account before you can start investing in stocks on the NYSE.
  3. Deposit funds. In order to begin trading, you’ll need to deposit money into your account. Depending on which platform you use, your money may be automatically converted from pounds into US dollars, and pay an extra fee for this.
  4. Buy NYSE stocks. Once your account is funded, you’ll be able to buy and sell shares. Most brokers or platforms will let you search for the specific NYSE stocks or US funds you want to buy.

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How much does it cost to invest in the NYSE?

If you want to invest in stocks listed on the NYSE from the UK or buy a fund that invests in US stocks, there are some key fees to look out for:

  • Commissions. There are 0% commission platforms that don’t charge you a fee to buy US stocks from the UK, but other platforms have charges that can range from £1 per to trade to over a tenner!
  • Foreign exchange (FX) fees. If you’re buying international investments from the UK, most platforms will charge you an FX fee for converting your pounds into another currency, dollars in this case. The FX fee is usually shown as a percentage and the amount you pay depends on the size of your trade.
  • Ongoing fund fees. You can invest in US funds that are denominated in pounds. This means potentially no fees to buy a fund (if you’re using a cheap platform with no commissions). However, funds will usually have ongoing fees, displayed as a percentage.

Other ways to invest in the NYSE

Most of the best ETFs and funds with a US focus don’t invest purely in NYSE-listed stocks.

Instead the most popular ETFs to invest in for US stocks copy something like the S&P 500 index, which is made from US stocks on both the NYSE and the Nasdaq.

Rather than buying individual US stocks on the NYSE, you can use funds and ETFs to target specific sectors like tech stocks or even companies that aim to pay out high dividends to shareholders.

Why should I invest in the NYSE?

The New York Stock Exchange is by far the world’s largest stock exchange, with a total market capitalisation of around $25 trillion. It features over 2,300 stocks, including some of the most valuable companies in the world.

If you’re looking to diversify your portfolio, the NYSE offers more access to stocks and securities than any other exchange in the world, including US stocks that you can’t find on the London Stock Exchange.

With many brokers and trading platforms now offering easy access to US stock markets, investing in the NYSE can be a good way to broaden your portfolio internationally.

Is now a good time to invest in the NYSE?

Check out the stock chart below to see how the NYSE is performing right now.

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Our expert says: What’s the best way to invest in NYSE stocks?

"Attempting to invest in every single individual stock listed on the NYSE is an admin nightmare, and could be costly if you’re not using a platform with low (or no) international trading commissions. A more sensible way to invest would be to pick a diverse selection of NYSE stocks that suit your investing strategy, perhaps around 30 (depending on what the rest of your portfolio looks like).

However, instead of buying individual stocks, for many investors, using a low-cost fund or ETF is a more efficient (and simpler) way to get diverse exposure to the best NYSE stocks. The downside is that you won’t get to control the exact stocks held in the fund. But it does make your life easier as an investor by investing more broadly in fund holding hundreds or thousands of top US stocks that you don’t have to managed on a day-to-day basis."

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Deputy editor

Pros and cons

Pros

  • Includes some of the biggest companies in the world
  • Wide variety of sectors
  • It can be cheap to invest in US stocks
  • Plenty of funds and ETFs available

Cons

  • Buying all the individual stocks would be expensive
  • Most funds and ETFs don't just track the NYSE
  • There can be exchange rate risks to consider
  • Buying funds or US stocks can be expensive if you don't use the right platform

Bottom line

The New York Stock Exchange is the world’s largest stock exchange, which is why it’s so attractive to companies and investors.

If you want to invest in US NYSE-listed stocks you can either buy individual shares where you’ll need to make sure your broker lets you invest in US shares, and that you’ve filled out a W-8BEN form.

You should also consider the fees involved in trading US shares, such as the commission and any additional foreign exchange fees. The other main option is to use a UK investment fund that invests in US stocks listed on the NYSE.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.


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Deputy editor
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George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio

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