How to invest in US shares in 2021

How does an ASX investor buy popular US shares like Apple or Amazon.com? Here are some different ways to invest in America on the ASX.

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Wall Street sign in front of US flag

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Investing in the United States and its markets has become increasingly popular in recent years. It’s easy to understand why. As technology and globalisation become ever more prevalent, we can’t help noticing brands like Apple Inc (NASDAQ: AAPL) and Alphabet Inc‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google pop up in the everyday household. Or cars made by Tesla Inc (NASDAQ: TSLA) or even Ford Motor Company (NYSE: F) appear on our roads, perhaps driven by an Uber Technologies Inc (NYSE: UBER) driver. Or apps that Netflix Inc (NASDAQ: NFLX), Walt Disney Co (NYSE: DIS), or Amazon.com Inc (NASDAQ: AMZN) supply on our TVs.

If you dig a little deeper in your own cupboard, you might find Kellogg Company (NYSE: K) cereal or razors made by Procter & Gamble Co‘s (NYSE: PG) Gillette.

American companies are everywhere in Australian life, often hiding under familiar brands. Take the popular ice creams Paddle Pop and Golden Gaytime. They are actually owned by the British-Dutch company Unilever UN (NYSE: UL), listed in the US.

So it’s understandable that Aussie investors might want a slice of the pie. And they do. You can take a look at our coverage of some of the most popular US shares that Aussie are buying.

Recently, we covered how the rising Australian dollar was making investing in US shares more attractive. So if you’ve never taken the plunge across the Pacific, it might be a good time to have a think about it. There’s nothing wrong with our own S&P/ASX 200 Index (ASX: XJO) of course. But the reality is that our market is a minnow in the ocean of global markets. The US markets are, by comparison, a pod of whales. I say a pod because the US has a few different markets you can invest in. Rather than just one major index, like our ASX 200, American investors have a few choices. There’s the old-school Dow Jones Industrial Average (INDEXDJX: .DJI), the uber-popular S&P 500 Index (INDEXSP: .INX), and the tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX).

Buying US shares on the ASX

You can always buy US shares directly through your ordinary broker. Many of the most popular Aussie share brokers, like Commonwealth Bank of Australia‘s (ASX: CBA) CommSec, or National Australia Bank Ltd‘s (ASX: NAB) NABtrade offer the opportunity to buy US shares like Apple or Netflix directly. There are also newer dedicated US brokers, like the popular Stake, which do the same.

However, if you don’t want to buy these shares directly, there are other options. Various managed funds and Listed Investment Companies (LICs) that are listed on the ASX invest in US shares. Some popular examples include the Magellan Global Fund (ASX: MGF) and MFF Captial Investments Ltd (ASX: MFF).

Otherwise, there are always US market-tracking index funds available on the ASX as well. Some examples include the iShares S&P 500 ETF (ASX: IVV), the Vanguard US Total Market Shares Index ETF (ASX: VTS), and the BetaShares Nasdaq 100 ETF (ASX: NDQ). There’s also a couple of currency-hedged options for the investor who wants to take currency fluctuations out of the equation. These include the iShares S&P 500 AUD Hedged ETF (ASX: IHVV) and the BetaShares NASDAQ 100 ETF – Currency Hedged (ASX: HNDQ).

Foolish takeaway

For the investor who wants to branch out and invest in US shares, there are more options available than ever. In the end, it just depends on your individual preferences as to which route you wish to take.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares), Ford, Magellan Flagship Fund Ltd, National Australia Bank Limited, Procter & Gamble, Tesla, Uber Technologies, and Walt Disney. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, Netflix, Tesla, and Walt Disney. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Uber Technologies and recommends the following options: short January 2021 $135 calls on Walt Disney, long January 2022 $1920 calls on Amazon, long January 2021 $60 calls on Walt Disney, and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, Netflix, and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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