Vanguard for Expats – How to Guide
If you are an expat looking to invest with Vanguard, you’ve come to the right place.
In actual fact, its never been easier to invest in Vanguard funds no matter where you live.
There are two key options available, but in reality, just about anyone can do it as long as you have an investment account.
In this guide, we give you two options.
- International Vanguard Platforms
- Alternative Investment platforms
Whether or not you can go with the first option will depend on where you live and your current situation.
On the other hand, option two is going to be available to 99.9% of expats reading this.
Not only that, but in many cases it is a more compelling option.
Lets get into it.
International Vanguard Platforms
Contrary to popular belief Vanguard doesn’t just operate in the US. It has a number of international operations that you may be able to open an account with.
That’s just to say, if you are lucky enough to live in a country that has an Vanguard’s international platforms, you maybe able to invest with them directly.
You’ll have to fulfill various requirements and be officially classed as resident in that country to open an account, but that should be a straight forward process if you tick all the right boxes.
Vanguard have a presence in each of the following regions/countries:
- Americas: Canada, Mexico, United States, South America
- Asia Pacific: Australia
- Europe: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Italy, Liechtenstein, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom
If you live in one of those places and meet Vanguard’s residence/domicile requirements you may be able to invest using Vanguard’s own platform.
To check, simply visit Vanguard Global, choose your country and you’ll be given the relevant contact details.
Depending on which country, it’s likely you’ll be able to send them a message using their online form, chat with a bot/followed by online representative or give them a call.
For example, here’s Vanguard UK contact details:
Vanguard UK Contact
Tel:
- From the UK 0800 587 0460
- From abroad +44 (0)20 3753 5087
- Lines open Monday to Friday, 9am to 5pm
- (Closed on public holidays)
Message/Chat:
- You can send them a message or chat here.
What if my country doesn’t have an international platform?
Of course, many of us don’t live in those countries. Not only that, but many an expat (in those countries) that has tried opening an account has been left feeling more than a little disappointed.
Like many things in life for us non residents, trying to open a Vanguard account can get messy. Even if you live in one of their countries of operation you still may run into a brick wall due to your non resident status.
But if that’s you, don’t think that means you can’t invest with Vanguard because you can. And the best news – it is super easy. You just use a alternative platform that’s open to expats.
Alternative Investment Platform
You own the shares no matter where you bought them from. If you buy shares in Vanguard funds from a different investment platform you still own those shares, just like you would if you bought them through Vanguard themselves. There’s no difference.
You still get access to all those super low cost high quality options that Vanguard is famous for.
And in fact, believe it or not, investing with Vanguard can be cheaper if you don’t use Vanguard’s own platform because other options have cheaper fees.
Hard to believe. I know. But it’s true.
You see Vanguard still has platform fees. The exact amount you pay will depend on exactly where you live and which one of Vanguard’s global options you are using.
As an example, Vanguard UK charges 0.15% to use their platform. Not crazily expensive, but then again, this is a time when high quality expat friendly investment platforms like Saxo Markets don’t even charge a fee. Sure you’ll have to pay a fee on purchase, but they are tiny.
Saxo could make an excellent alternative to Vanguard expat investors can use. How do I know? Because lots of them do.
Have a look at the table below.
Fees for Saxo Bank
| Size of trade (£ UK $ US) | UK | US |
| at or below £/$ 3000 | £3 | $1 |
| £/$5000 | £4 | $4 |
| £/$10000 | £8 | $8 |
And by the way, platforms like eToro (for Global expats) and Lightyear (for expats in Europe) don’t charge buying and selling fees when you buy Vanguard ETFs or have platform charges full stop.
The bottom line being, all you need to do is find an investment platform for expats and choose Vanguard funds. It really is that simple. (We’ve covered some of the better investment platforms for expats here).
We are coming to some fund options if you are new to all this, but if you want to invest in Vanguard as an expat all you need to do is complete four simple steps.
Key Steps
- Open an investment account with a platform that accepts expats.
- Choose the Vanguard exchange traded funds (ETFs) you want to invest in (more on this below).
- Log in to your account and purchase shares in your chosen ETFs.
- Repeat whenever you have fresh money to invest.
It is really that simple!
Vanguard Funds Suitable for Expatriates
Which funds you choose is entirely down to your personal requirements. There are a lot of them.
But a maximum of two funds should fulfill most investors requirements.
Some platforms may allow you to invest in a single fund like Vanguard Life Strategy. The ultimate set it an forget it.
The UK versions of these funds come packaged as index funds meaning expats can’t invest. However, you can invest in the European versions. Just bear in mind, these are tilted towards the euro rather than the pound.
If you live in Europe or intend to retire there, that’s not an issue. Living elsewhere not so much. That is because tilting towards the euro exposes you to currency risk.
If the Euro strengthens against whatever currency you use (or will use in retirement) you could loose money. But again, there are ways around this problem if you don’t live on the continent.
Vanguard Lifestrategy Alternative
The easiest way to invest for most people, is to use two funds. One for stocks (shares) and another for bonds.
And with Vanguard it’s easy to put together a globally diversified portfolio of stocks and bonds with just a couple of funds anyway.
Take the following two ETFs for example:
Global Aggregate Bond UCITS ETF (VAGP)
FTSE All World UCITS ETF (VWRL)
With those you’ve pretty much got the same thing as a Vanguard UK Life Strategy fund anyway. Global stocks and bonds with the bonds being hedged to pounds so you don’t have to worry about currency risk if you intend to retire back to the UK.
Just go to your investment account, enter tickers VAGP and VWRL and click buy. It couldn’t be simpler.
Investing in these two funds would widely diversify your investments over different assets and geographies. It would be tax efficient and low cost.
The only thing you need to worry about is how to split your money between stocks and bonds. (You can read more about that here if you are interested).
That’s it! You have invested with Vanguard. Remember, it is you that owns the shares in the funds not your broker so you really have invested with Vanguard.
(Just to be clear this is an example not a recommendation).
If you aren’t planning on retiring back in the UK or Europe we’ve talked about some options for you here.
Alternatives
Everybody loves Vanguard, but that doesn’t mean there aren’t good alternatives out there.
Sure, all things being equal, choosing Vanguard probably makes sense, but sometimes things aren’t equal or more likely you simply don’t have access to the particular Vanguard fund you want.
Dare I say it, as good as Vanguard are, you could just use another fund provider. These days there are plenty of cheap exchange traded funds out there.
Investing in a Vanguard alternative like iShares is perfectly acceptable option. They have equivalents to most Vanguard options. Usually for similar prices, but sometimes even cheaper.
Another big alternative that has come on to many expats radar in recent times is Invesco.
This is because they have released their own version of FTSE All World UCITS ETF with a cheaper OCF. We’ve compared this with Vanguard’s here.
The Bottom Line
Lovers of Vanguard overseas have two key options for investing as an expat.
First, they maybe able to invest through an international platform, depending on their country of residence and current status.
Second, they can invest with Vanguard by simply buying shares in Vanguard funds through other investment platforms.
In fact, just about any expat with a brokerage account should be able to invest with Vanguard.
It doesn’t matter where you buy shares in Vanguard funds. You still own those shares.
Open an investment account, choose one or two Vanguard funds and simply add money whenever you have some free.
