Opening investment funds

Hi all,

I'm young and want to start saving for the future. I have several questions as this is my first time, sorry for being a newb!

From what I've read, I need to invest in a fund which is domiciled in the US but reports to HMRC, and there are lists/online resources to find such funds. I also understand that for some reason ETFs are easier to do than index funds or mutual funds (correct me if that's wrong).

I'm looking for a diversified fund to which I can contribute regularly (ideally monthly). Is an ETF something that I can just transfer money to regularly and buy more shares of? Or did I get that wrong? If so what would be a good alternative?

I've also read that many US funds made it difficult for expats to open accounts with them following regulation changes.

Can anyone recommend a firm that takes on new expat clients?

Thanks for any and all advice!
Max

I am a big fan of Vanguard which has a good selection of low cost funds.  I am a US customer but they do have a UK based branch that you can look through in the link below. On that link under "Invest With US" is an 0800 number to discuss UK Domiciled funds.
https://www.vanguard.co.uk/uk/portal/home

For Vanguard, ETF's are favored because all/most are HMRC reporting.  Balanced funds are a mix of stocks of bonds, ETF's are usually one or the other I believe. Mutual funds are not HMRC reporting.  I used to invest in balanced mutual funds because that was the easiest route but in preparation for moving back to the UK I moved the money from the balanced fund into ETF's.

I'm sure there other low cost options such as Fidelity, but I'm most familiar with Vanguard. (My wife's retirement account and ETF's are with Fidelity)

https://www.fidelity.co.uk/investor/default.page

I am a big fan of Vanguard which has a good selection of low cost funds.  I am a US customer but they do have a UK based branch that you can look through in the link below. On that link under "Invest With US" is an 0800 number to discuss UK Domiciled funds.
https://www.vanguard.co.uk/uk/portal/home

For Vanguard, ETF's are favored because all/most are HMRC reporting.  Balanced funds are a mix of stocks of bonds, ETF's are usually one or the other I believe. Mutual funds are not HMRC reporting.  I used to invest in balanced mutual funds because that was the easiest route but in preparation for moving back to the UK I moved the money from the balanced fund into ETF's.

I'm sure there other options such as Fidelity, but I'm most familiar with Vanguard.

Thanks a lot for the info! Does that mean it would be ok for the IRS if I open US domiciled funds through the UK branch of Vanguard? Vanguard was actually my preferred company as I've heard good things about them.

Thanks a lot for the info! Does that mean it would be ok for the IRS if I open US domiciled funds through the UK branch of Vanguard? Vanguard was actually my preferred company as I've heard good things about them.

That I am not sure about, hopefully someone more knowledgeable will chip in. I would be concerned if the funds did not trade on the NY stock exchange otherwise the IRS may consider them as PFICs

If you buy Vanguard funds, you'll want to do it through a US broker.  I am planning on buying Vanguard ETFs through Charles Schwab UK.  Not only are they HMRC reporting, but because they are US based (although the branch is in the UK, all the accounts are considered US domiciled), you aren't subject to PFIC rules.  It's hard to find US brokers that will accept non-residents, but Charles Schwab will, also Interactive Brokers. Maybe Asset Builder?

I just watched a webinar from Thun Financial on this this morning, and they also have a good article, http://thunfinancial.com/american-expat-pfic-uk-non-reporting-fund-investment-trap-article/

If you buy Vanguard funds, you'll want to do it through a US broker.  I am planning on buying Vanguard ETFs through Charles Schwab UK.  Not only are they HMRC reporting, but because they are US based (although the branch is in the UK, all the accounts are considered US domiciled), you aren't subject to PFIC rules.  It's hard to find US brokers that will accept non-residents, but Charles Schwab will, also Interactive Brokers. Maybe Asset Builder?

I just watched a webinar from Thun Financial on this this morning, and they also have a good article, http://thunfinancial.com/american-expat-pfic-uk-non-reporting-fund-investment-trap-article/

Thanks a lot for the info and the article.

I have one follow up question. You said that I should go through a US brokerage, but you said you're going to buy them from Charles Schwab UK? If that's possible, that's what I would like to do too, because I've heard it's hard to find a US brokerage that takes on new, non-resident investors...

Thanks!

Well Charles Schwab US would take you too. I just like the idea of opening our accounts with an office in the UK. All the accounts from any Charles Schwab are based in the US.

I talked with someone from Charles Schwab global who said I can call him from the US or UK with any questions.

Well Charles Schwab US would take you too. I just like the idea of opening our accounts with an office in the UK. All the accounts from any Charles Schwab are based in the US.

I talked with someone from Charles Schwab global who said I can call him from the US or UK with any questions.

got it! thanks a lot for your advice