Update on US stocks


#1

Hey everyone,

Just thought I’d post an update on a certain big upcoming feature:


#2

This has probably already been asked and answered … but I’m going to ask anyway.

Can I buy US stocks inside my ISA?


#3

Thank you for the nice update. :clap: It’s always good to know.


(Vladislav Kozub) #4

You can hold any foreign stocks of a recognisable stock exchange in your ISA. Most ETFs, unfortunately, will not be eligible as they do not tend to apply for UK authorisation.

AIM stocks are also not allowed to be within your ISA. Tencent is an example of such (but it is not in the current universe anyway). This ban was removed to incentivise investing in smaller companies.


(paul) #5

would ETF’s like Vanguard S & P 500 (VUSD) be ISA eligiblle?


(Big Boss) #6

Yes


#7

AIM stocks are allowed, much to my personal pain - if they weren’t I might not have lost so much considering the trash on AIM.


(Nicola Greenwood) #8

One other thing to bear in mind when looking at investing in US stocks in your ISA is ADR’s.

Firstly, what are they? An American Depositary Receipt is a way for non-US companies to allow trading in the US market, they are owned and issued by US banks.

Can they be held in an ISA? This all depends on the underlying company and where it is traded, it is not based on where the ADR is traded (eg NYSE, NASDAQ). If the underlying company is traded on a recognised exchange then you can invest in your ISA, but if it isn’t then you can’t.

So, if you buy an ADR for a Canadian company which is listed on the Toronto stock exchange, that can go into your ISA. But, if you buy an ADR for an Indian company, where there isn’t a recognised exchange, this can only go into a GIA.


#9

Such an ISA nerd :nerd_face::wink:


(Vladislav Kozub) #10

You are right here, my source was five years old :grimacing:

Thanks @Nicola, for such an extensive ISA clarification! :slight_smile:


#11

Will 20% of a US stock be the smallest fraction available to buy ?


(Vladislav Kozub) #12

£1 will be the minimum, regardless of the original share value:

image

Or even 1 penny, it is not perfectly clear what the definition of “any amount” is :sweat_smile:


(Vladislav Kozub) #13

It would be quite curious to know if Freetrade will at some point allow pre-market (from 4 am EST / 9 am GMT) and after hours (until 8 pm EST / 3 am GMT) trading for the US stocks. At least the most liquid ones, whose spreads do not change drastically.


(Chris) #15

Sorry I know this has been answered but I honestly can’t remember (or find it). Fractional purchases will not be available at the launch of US securities? Correct?


US stock descriptions are here!
Update on US stocks
When will US stocks be available?
(Alex Sherwood) #16

Hi! That’s correct, we announced that in this :point_up_2: blog post:

When are fractionals coming? ⅜

Next year!

For those who haven’t heard previously, fractional stocks are the ability to buy or sell fractions of whole shares. Instead of buying 1 share of Apple for £150, you could just invest £30 and get 20% of a share. Or 1/5 if you like your percentages expressed as fractions. It’s the same thing! Ah, maths: what don’t you think of?

No other UK broker offers fractional stocks and they’re a vital part of our roadmap.

PS - sorry for moving your post around a few times, I hope I didn’t make you dizzy!


(Chris) #17

No problems, thanks!!!


#18

Curious on how the chosen stocks so far came about? Would have thought the entire DOW would be among the first stocks


#19

We chose our initial bunch based on what we saw and predicted the most initial user demand for - we’re going to expand the list dramatically as we improve the Discover tab over next year.

Think we’re missing a couple out of the DOW - an insurance company and United Tech.


(Chris Patten-Walker) #20

So to be clear is 1 pound the min?


(Vladislav Kozub) #21

At the moment, while fractional shares are not yet available, the minimum is purchasing a single share. In the UK these can be as low as £2 (maybe even less), whereas in the US you’d be looking at about £20-30, mostly above £100 and sometimes above £1,000, purely depending on what you are buing.