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.
What are the FAANG stocks and how can I invest in them?
Here's how to get your teeth into some of the biggest tech companies in the world.
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.
What are the FAANG stocks?
Why invest in the FAANGs?
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.
What does it mean to diversify your portfolio?
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:
- The sectors you’re invested in. Such as getting a mix of manufacturing, technology and agricultural stocks.
- The types of investments you have. Such as stocks, shares and bonds, some of which have more risk than others.
- The geography of your investments. Such as buying on global stock exchanges instead of just your local one.
Can I buy FAANG stocks on the London Stock Exchange (LSE)?
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).
What’s the NASDAQ?
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).
How can I access stocks and shares that are listed on the NASDAQ?
There are three main ways that you can invest in global stocks and shares from the UK, these are:
- Using a broker
- Investing in funds
- Investing in exchange-traded funds (ETFs)
Invest in FAANGs using a broker
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. You can compare share trading platforms below.
Compare online broking platforms
Table: sorted by promoted deals first
Invest in funds
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.
Invest in exchange-traded funds (ETFs)
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.
Best ETF brokers
How to buy FAANG stocks in the UK
It’s really easy to buy FAANG stocks and shares in the UK. Just follow these steps:
- Choose a share trading account. We’ve compiled a list of the best trading apps, but on the whole, it comes down to what you’re looking for. Consider the fees, what you can trade, what the platform is like and the tools available to you to find one that works for you.
- Open an account. You might need some personal details and ID like your passport or driving licence to do this.
- Fund the account. You’ll need to have enough to cover the shares that you want to buy, and maybe to cover the fees.
- Search for the shares that you want to buy. You’ll need the trading code, which is above.
- Place an order for the number of shares you wish to purchase. You can often set the price you’d like to pay, so the order goes through if the target is reached.
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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