Best ISA / SIPP for buying foreign stocks

caldi9

Good evening,

Most UK SIPPs / ISAs charge high FX fees for buying eg US stocks. Any ideas what SIPPs / ISAs to use? Am investing 5-10 times per year, ie no heavy trading.

Thanks

AnotherJoe

I used TD Direct which had the handy feature that once you bought a US stock you can leave the proceeds in $ when you sell it so then you've still got $ to buy different stocks, so you only get hit once on putting the money in. (and when you eventually take it out as well I suppose)

I dont know if it remains the same with iii, i hope so, though I've stopped trading US stocks now and am just burning them down.

That is though a share dealing account not a SIPP. I believe but am not 100% that the same capability exists with their ISA but not with SIPPs where I think for some technical reason this isn't allowed.

p.s. I do have some US shares in my HL SIPP, but there is a heavy penalty with that, if you buy US shares you get hit on FX when buying with £, when you sell the proceeds get turned back to £ which means another hit when you next buy a $ share. So they really need to be very long term holds when doing that.

caldi9

Did TD charge an initial FX fee, how much is it? Or did you use your own USD?

Voyager2002

TD has now been taken over by Interactive Investor.. The trading account still allows you to hold money in dollars and use it to buy or sell dollar-denominated securities. However, the ISA does not allow you to hold foreign currency, nor securities that are not traded in London. This is a legal requirement, and I imagine that it would also apply to any SIPP.

grey_gym_sock

it's a rule of ISAs, not of SIPPs, that cash can only be held in sterling.

you are generally allowed to buy shares listed on any recognized stock exchange in an ISA (and SIPPs are even less strict - they may also allow unlisted shares).

perhaps you are thinking of the new requirement for a KID to be available before you can buy a collective investment (including an ETF, or an investment trust). this may prevent purchases of ETFs and investment companies listed outside the UK. but won't affect purchases of other kinds of companies. it also applies to all account types (trading account, ISA, SIPP).

caldi9

Do you know any good SIPPs to hold foreign stocks? ie a low FX fee

grey_gym_sock

well, i have a SIPP with aj bell youinvest, which is not that cheap for FX: 1% when buying or selling shares, and 0.5% to convert dividends back to sterling. perhaps only good for very long-term buy-and-hold.

for some other possibilities, look for providers with currency charges under 1% (and who have a SIPP) in this table: https://the-international-investor.com/comparison-tables/uk-international-stockbrokers ... though note that is now a bit out of date (e.g. it doesn't show that interactive investor have taken over td direct; or that IG do now have a SIPP, however they're about to introduce new quarterly charges).

you obviously need to look at FX charges combined with other SIPP charges.

and if you pick a provider who offer a multi-currency account (also shown in the table), that might make up for higher FX charges.