Can US investors buy UCITS?
UCITS funds must register with the SEC before U.S. investors can buy in. Specifically, that means the funds register under the Securities Act and the Investment Company Act. A work-around for this requirement exists in the form of a private placement offering.
U.S. investors, for example, can buy shares of UCITS through U.S.-based fund managers, although local, EU-based money managers run the funds.
Any person may invest in a UCITS fund. UCITS funds are a highly popular form of investment, especially for European retail investors. While they may be offered worldwide, they're especially popular with Europeans making smaller investments.
The Shares may not be offered, sold, transferred or delivered, directly or indirectly, in the United States, its territories or possessions or to U.S. Persons (as defined in Regulation S under the Securities Act) except to certain qualified U.S. institutions in reliance on certain exemptions from the registration ...
ETFs which are UCITS compliant must follow minimum standards - that includes holding a diversified portfolio, publishing clear guidance on their charges and taking steps to safeguard investors' money. Some ETPs are not eligible for UCITS standards - including ETCs, ETNs and US-listed products.
Hargreaves Lansdown offers taxable brokerage, ISA, LISA, and SIPP accounts to US persons.
The EU MiFiD regulation prohibits brokerage firms to sell funds to European retail investors, which do not provide certain regulatory documents, such as a Key Information Document (KID). Notably, differences in US and EU regulation make it impossible for US-ETFs to provide such documents.
No single asset can represent more than 10% of the fund's assets; holdings of more than 5% cannot in aggregate exceed 40% of the fund's assets. This is known as the "5/10/40" rule.
All UCITS funds and many AIFs are marketed to the public, therefore most companies are set up as public limited companies.
For ETFs using derivatives, exposure should be covered with collateral valued at 90% of NAV and meet minimum risk management standards. UCITS funds cannot use leverage other than on a temporary basis and up to a maximum of 10% of their NAV.
Are Sicav and UCITS the same?
SICAVs are often contrasted with SICAFs. SICAFs are similar to closed-end funds in the U.S. SICAFs are an acronym for Société d'Investissem*nt à Capital Fixe. They are traded on public market exchanges and operate with a fixed number of shares. UCITS structured SICAVs are actively cross-border marketed in Europe.
Offshore mutual funds are professionally managed funds that are established and registered outside the United States and are only available to non-U.S. citizens and non-U.S. residents. Offshore mutual funds are registered under the laws of non-U.S. jurisdictions, typically those with tax-advantageous benefits.
No, for legal reasons we can't offer you an account, as our funds are UK-only.
Due to the new PRIIPS legislation, as of the 2nd of January 2018 a number of (foreign) products have become unavailable to purchase. Holding or selling these products remains possible, however it is not possible to purchase or expand your position in these products.
Vanguard S&P 500 UCITS ETF (VUSA)
This Fund seeks to track the performance of the Index, a widely recognised benchmark of U.S. stock market performance that is comprised of the stocks of large U.S. companies.
ETF | 2024 in % | 2021 in % |
---|---|---|
Xtrackers S&P 500 Swap UCITS ETF 1C | + 11.16% | +30.20% |
iShares Core S&P 500 UCITS ETF USD (Dist) | + 11.15% | +29.99% |
Vanguard S&P 500 UCITS ETF | + 11.15% | +29.99% |
iShares Core S&P 500 UCITS ETF (Acc) | + 11.12% | +29.99% |
The problem with this form of investment for US citizens, is that funds in the UK are classes of “non-US pooled investment products”. The IRS classifies these as Passive Foreign Investment Companies (PFICs), which they really don't like and therefore charge a highly punitive level on them.
You can invest in a range of assets in the UK as a non-UK resident, including stocks, bonds, and real estate. This can be done via a variety of investment vehicles, including mutual funds, investment trusts, and stocks and shares ISAs.
The SIPP allows you to invest in US Dollars and you can choose from a wide range of investments including Shares, Bonds, Funds, ETFs, Investment Trusts and other currencies. You can manage your pension from your online account so you don't need to worry about sending forms and paperwork to the UK.
U.S. residents can NOT purchase non-U.S. ETFs. Individual fund eligibility is determined by the client's legal country of residence as well as where the non-U.S. ETF is registered to be sold. Non-U.S. ETFs can be traded with the help of a Schwab Global Investing specialist and are subject to foreign transaction fees.
Are Ucits subject to US estate tax?
UCITS are a type of non-U.S. investment registered on a foreign exchange. UCITS aren't considered U.S. assets and therefore aren't subject to U.S. estate tax.
Conversely, UCITS ETFs usually enjoy: Lower Withholding Taxes – on dividends due to favourable treaties with countries where they are commonly domiciled, like Ireland and Luxembourg. No Estate Taxes – They pose no U.S. estate tax exposures. Simplified Tax Reporting – They offer simplified tax reporting.
UCITS as a brand has been recognised across the world, and many UCITS are registered in non-EU countries such as Switzerland, Hong Kong, Singapore, Taiwan, Bahrain, the UAE, Chile and Peru.
A UCITS may acquire no more than 25% of the units/shares of the underlying UCITS or UCI (or the aggregate amount invested in one or more sub-funds of an umbrella UCITS). 2. Such UCITS or UCI cannot itself invest more than 10% in other UCITS or UCIs.
This has been enshrined in what is commonly known as the 5/10/40 rule which is that a UCITS may invest no more than 10% of its net assets in transferable securities or money market instruments issued by the same body, provided that the total value of transferable securities or money market instruments held in issuing ...
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