How to Buy US Treasuries in the UK

Can I Buy US Treasuries in the UK?

Yes, if you're in the UK, you can easily invest in US Treasuries, like bonds, bills, and ETFs, through FCA-regulated platforms. Plenty of UK brokers offer access to these options. You can pay using standard methods like bank transfers, Faster Payments, or even credit cards, making it simple to add US government debt to your portfolio.

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How to Buy US Treasuries in the UK

Investing in US Treasuries from the UK is easy using platforms like eToro, which gives you access to a variety of options. Whether you're after short-term picks like the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) or medium-term ones like the iShares 1-3 Year Treasury Bond ETF (SHY), it’s all available.

Here’s how to get started:

1. Create an Account: Sign up on eToro and complete the necessary identity verification process.
2. Deposit Funds: Transfer British Pounds (GBP) into your eToro account using UK payment options like Faster Payments or BACS.
3. Currency Settings: Set 'GBP' as your primary currency and choose a payment method, such as a UK bank transfer.
4. Select an ETF: Use eToro’s search function to find and invest in the US Treasury ETF that suits your goals.

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Best US Treasury ETF for UK Investors

Picking the right US Treasury ETF comes down to your goals, risk tolerance, and how long you're looking to invest. Different ETFs focus on different parts of the yield curve, offering varying levels of risk and return.

Here are some top choices for UK investors:

1. SPDR Bloomberg 1-3 Month T-Bill ETF (BIL): Ideal for those who want low risk, this ETF sticks to short-term Treasury Bills.
2. iShares 1-3 Year Treasury Bond ETF (SHY): A solid option for a bit more yield with controlled risk, focusing on bonds with 1-3 year maturities.
3. iShares 20+ Year Treasury Bond ETF (TLT): For higher potential returns and more risk, this ETF goes long on 20+ year bonds.
4. Vanguard Intermediate-Term Treasury ETF (VGIT): A balanced option, this ETF covers mid-term bonds, offering a moderate yield-risk tradeoff.

You can also look at currency-hedged options if you're concerned about exchange rate fluctuations. Always do your homework and consult a financial advisor before making any decisions.

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What are the Fees?

Fees for trading US Treasury ETFs depend on your platform and the type of trade. Here’s a breakdown of the typical fees with eToro:

1. Commission: eToro offers commission-free trading on US Treasury ETFs unless you’re dealing with short or leveraged trades.
2. Market Spread: This is the price difference between buying and selling an ETF, which adds to your trading cost.
3. Overnight Fees: For leveraged positions held overnight, eToro charges a fee tied to the 1-month USD LIBOR rate.
4. Weekend Fees: If you keep positions open over the weekend, eToro applies a triple overnight fee, usually charged on Fridays.
5. Expense Ratio: This is an annual fee charged by the ETF itself to cover operational costs.

It’s essential to review eToro’s fee structure before trading to understand all costs and manage your investments effectively. Keep in mind that trading involves risks to your capital.

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Bottom Line

In short, UK investors can easily access US Treasuries through platforms like eToro, offering a range of ETFs to fit different risk levels and investment timelines. Make sure to review the fees and pick options that suit your goals. 

As always, it’s smart to consult with a financial advisor to ensure your investment decisions align with your strategy.