2

For the last several years I've been working in the US and investing my dollar salary in a classic boglehead-style three-fund Vanguard portfolio. I've been really happy with this setup. This year I moved to the UK and am working for a British company, so I'm now paid in British pounds. I've searched around a bit and it looks like I can't purchase my favorite Vanguard index funds directly with pounds - I'd have to exchange to dollars first. This seems quite inefficient, especially given the recent fall in pound's value. As a result, I'm looking for other options for investing the pounds.

One thing I've considered is trying to find funds that track US and international stock indexes that trade in pounds. Are there any good US/international stock tracking funds that trade in GBP?

Another alternative I've considered is investing the pounds in British investments, such as an FTSE tracking fund. Whether or not this is a good idea may depend on how the Brexit transition effects the British economy.

Any other suggestions are very welcome.

  • 1
    Note: if you plan on moving to the US in the future (or if you plan on having any significant US expenses, like sending a future child to a US university, or something like that), then holding some savings in USD would be relatively 'safe' for you. If you plan on never spending any significant USD again, then it would be relatively 'safer' to sell all USD and only hold GBP investments. – Grade 'Eh' Bacon Sep 12 '16 at 16:19
3

The London Stock Exchange offers a wealth of exchange traded products whose variety matches those offered in the US. Here is a link to a list of exchange traded products listed on the LSE. The link will take you to the list of Vanguard offerings. To view those offered by other managers, click on the letter choices at the top of the page. For example, to view the iShares offerings, click on "I".

In the case of Vanguard, the LSE listed S&P500 ETF is traded under the code VUSA. Similarly, the Vanguard All World ETF trades under the code VWRL. You will need to be patient viewing iShares offerings since there are over ten pages of them, and their description is given by the abbreviation "ISH name".

Almost all of these funds are traded in GBP. Some offer both currency hedged and currency unhedged versions. Obviously, with the unhedged version you are taking on additional currency risk, so if you wish to avoid currency risk then choose a currency hedged version. Vanguard does not appear to offer currency hedged products in London while iShares does. Here is a list of iShares currency hedged products. As you can see, the S&P500 currency hedged trades under the code IGUS while the unhedged version trades under the code IUSA.

The effects of BREXIT on UK markets and currency are a matter of opinion and difficult to quantify currently. The doom and gloom warnings of some do not appear to have materialised, however the potential for near-term volatility remains so longs as the exit agreement is not formalised. In the long-term, I personally believe that BREXIT will, on balance, be a positive for the UK, but that is just my opinion.

  • It's important to note, if you're a US citizen living in the UK, US tax law will impose some stiff penalties if you invest in funds that aren't domiciled in the US. More information here. **Disclaimer: I'm not an expert on this, just going based on the info in that link. – sudo-nim Sep 14 '16 at 10:20

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.