The reason why US-domiciled ETFs are not available for European investors can be summed up in one word: compliance.
To be allowed on EU markets, US-domiciled ETFs (exchange-traded funds) are required to produce documentation according to standards prescribed by MiFID, the EU's legal framework for securities trading. These are called KIDs (Key Information Document); all EU ETFs have these, but most US ETFs don't. However, some brokers still provide US ETFs to EU investors despite these regulations.
What brokers provide US ETFs?
Mainly brokers that are also based in the US, or brokers that are based elsewhere but also have operations in the US. For example, eToro and tastyworks both provide US ETFs.
Are there alternatives to US ETFs?
Yes, there are funds out there providing the same features as a US ETF. Large fund providers such as Vanguard and iShares offer such products in fund form.
What else do you need to know about ETFs?
Want to know more before deciding which is the best ETF for you? Check out these articles to deepen your knowledge:
- What is an ETF?
- What is the difference between mutual funds and ETFs?
- What is the difference between US and EU ETFs?
- What does an ETF portfolio mean?
- What is an ETF expense ratio?
- How to invest in ETFs?
- How liquid are ETFs?
- How to buy Vanguard ETFs?
- How to buy iShares ETFs?
- What are sector ETFs?
- What is passive investment?
How can I buy ETFs?
For more info, click here to learn how to buy ETFs online.