I’ll talk a little about how I bought stocks in the UK in this post.
The asset I bought is the CSUKX-GBP, it is sold in pounds sterling.
To buy the British pounds you can buy inside the home broker of Interactive Brokers, on a forex tab, go there and exchange your dollars for pounds sterling, it is quite easy, have a video tutorial on the site explaining. The values are changing at all times as in common negotiations, but the difference sometimes does not even give a cent, so if you do not have much patience to wait to make the offer at the asking price that the order executes soon. After that, the bought currency enters into your assets within the brokerage house and you will be able to buy the other assets that are sold in that particular currency.
Basically, there are 2 indexes there: the FTSE100 and the FTSE250.
The FTSE100 represents the 100 largest companies in the UK, and the FTSE250 the 250 largest.
Here is the link to the ETF page: FTSE100 Acc
I would really like to buy the FTSE250 to pick up more midcaps and small caps (who knows), but I did not have this accumulation asset and at a good rate as I would like, so I ended up buying the FTSE100, when they put FTSE250 to sell I’m going to buy it and stop buying the FTSE100.
To tell you the truth I like some of these companies and in an old phase of assembling individual stock portfolio I had chosen some of them, but now that I have changed my strategy to passive ETFs (and I explained why this in past posts) and I feel good quieter because of it, really, the ETF gives me a sense of security greater than a stock, even more so in speaking of companies abroad.
From what we know of the UK: strong currency, resilient economy, highly educated population, stable political landscape, global companies.
From January / 2010 to January / 2017, the asset increased + 72.9% (remembering that with the strong currency and in a country with practically zero inflation.)
The United Kingdom was once the largest empire on the planet not long ago and still has influence in various corners of the world, from islands in Polynesia to the Caribbean, including the Falkland Islands in southern Argentina and still some former African colonies.
About Brexit, I personally think it’s going to be very good for the English economy, but my take on this does not mean anything. I have the impression that smaller, leaner countries are better able to organize and that the European Union was bad for the UK, but I have no evidence, that is what I have concluded for myself.
There are certain things that you have to follow your intuition, there is no way, you end up applying some of your world knowledge in investments, about things that can not be measured on paper.
I bought this asset in December / 2016, since then it has appreciated + 4.84%. I compared his multiples with those of the SP500 and he was a little better.
His CAPE was at 14.8 against a CAPE of 26.4 SP500.
His P/E was at 19.9 against a P/E of 20.8 from SP500.
His PB was at 1.9 against a PB of 2.95 of SP500. (BIG DIFFERENCE HERE)
The administration rate (fee expenses) is the same as 0.07%.
Both do not pay dividends.
It is interesting to note that the US PB has been increasing considerably, even without a real increase in profits, which remain stagnant.
The return of the index almost always gets much higher than the inflation of the United Kingdom.
The top 10 companies in the index amounted to almost 40% of the ETF, which I thought was a bad thing because it is well concentrated in this way, plus two large companies in the energy sector (oil), Shell and BP.
British American Tobacco was the company that bought Souza Cruz here from Brazil and nowadays it is a giant in the tobacco sector. Anyone who wants to invest in Souza Cruz, can buy British Tobacco and remain a partner, or buy this ETF that has 4.8% of British tobacco.
The ETF page at ishares makes studying much easier and you quickly compare with any other ETF and their respective valuations.
With this post, I have already posted three direct posts on overseas assets that I have bought: Berkshire Hathaway, CPXJ and now CSUKX-GBP.