How to Buy US Treasuries in the UAE

Can I Buy US Treasuries in the UAE?

Yes, investors in the UAE can purchase US Treasuries, including Treasury Bonds, Treasury Bills, and Treasury ETFs. These government-backed securities are available through regulated brokers in the UAE. Investors can fund these purchases using bank transfers or debit cards, providing a straightforward way to invest in US Treasuries and earn stable returns.

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How to Buy US Treasuries in the UAE

Purchasing US Treasuries from the UAE is straightforward using platforms like eToro, which provides access to a variety of US Treasury ETFs. eToro is known for regulatory compliance and offers options such as the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) for short-term investments and the iShares 1-3 Year Treasury Bond ETF (SHY) for medium-term holdings.

Follow these simple steps to get started:

1. Sign Up: Register with eToro and verify your identity.
2. Deposit Funds: Add money to your account using common UAE payment methods.
3. Choose Deposit Method: Select your preferred option, such as a bank transfer from a UAE bank.
4. Search and Invest: Use the platform’s search feature to find and invest in your chosen US Treasury ETF.

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Best US Treasuries for UAE Investors

Selecting the right US Treasury ETF depends on your financial goals, risk tolerance, and investment timeline. US Treasury ETFs vary from short-term to long-term, each with different risk and return characteristics.

Consider these options for UAE investors:

• SPDR Bloomberg 1-3 Month T-Bill ETF (BIL): Best for low-risk, short-term investments.
• iShares 1-3 Year Treasury Bond ETF (SHY): Balances yield and risk with 1-3 year bonds.
• iShares 20+ Year Treasury Bond ETF (TLT): Suitable for those seeking higher returns with long-term bonds.
• Vanguard Intermediate-Term Treasury ETF (VGIT): Offers a mid-term option with moderate risk and return.

UAE investors should also evaluate whether to invest in currency-hedged or unhedged ETFs based on their view of currency risk. Consulting a financial advisor and conducting thorough research is recommended before investing.

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What are the Fees?

Trading US Treasury ETFs in the UAE involves several potential fees, depending on the platform and specific transactions. Here’s a summary of the fees you may encounter on eToro:

1. Zero Commission: eToro allows commission-free trading on US Treasury ETFs, except for short positions or those using leverage.
2. Currency Conversion Fees: Transactions in currencies other than USD will incur conversion fees.
3. Market Spread: This is the difference between the bid and ask prices of a security, an inherent cost in trading.
4. Overnight Fees for CFDs: Fees apply to leveraged positions held overnight, calculated based on the 1-month USD LIBOR rate.
5. Weekend Fees: Positions held over the weekend incur triple the usual overnight fee, typically charged on Fridays.

UAE investors should carefully assess eToro's fee structure to understand the full cost of trading before making investment decisions.

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Bottom Line

Investing in US Treasuries from the UAE is a straightforward process, offering access to a range of secure government-backed options through regulated brokers. By understanding the available ETFs, associated fees, and choosing the right platform, UAE investors can effectively diversify their portfolios and achieve stable returns.