The 3 Easiest Ways to Buy International Stocks

U.S. investors can easily diversify portfolios globally without opening foreign accounts. Whether you prefer simplicity, control, or brand familiarity, three key routes, international ETFs, global brokerage access, and ADRs, make global investing straightforward through U.S.-based platforms like Charles Schwab, Fidelity, or Interactive Brokers.

• International ETFs: Funds such as Vanguard Total International Stock ETF (VXUS) or Schwab International Equity ETF (SCHF) offer one-click access to developed and emerging markets, no foreign accounts or currency management required.
• Global Brokerages: Platforms like Interactive Brokers and Schwab Global Account enable direct trading on foreign exchanges. Expect small FX fees (≈0.1–1%) and foreign dividend withholding, often offset via the IRS Foreign Tax Credit.
• ADRs (American Depositary Receipts): Trade global giants like Nestlé or Toyota directly on U.S. exchanges in dollars. These provide easy international exposure with familiar trading and settlement processes.
• Tax & Currency Considerations: Most countries withhold 10–30% of dividends. Currency movements affect unhedged ETFs, choose hedged versions like iShares Currency Hedged MSCI EAFE ETF (HEFA) to minimize volatility.
• Best Fit: Start with a broad ETF (VXUS or SCHF) for simplicity, then layer in ADRs or direct global holdings for targeted diversification.

After years of strong U.S. returns, many investors are asking whether adding overseas companies could strengthen portfolio diversification. Owning global giants like Nestlé, Toyota, or Samsung sounds appealing, but the logistics can seem intimidating. Do you need a Swiss brokerage? A yen-denominated account? In most cases, no.

Today’s investing platforms make it simple to access global markets directly from a U.S. brokerage account. Below are the three most practical ways to do it, along with what to know before you click “buy.”

1. International ETFs — The One-Click Option

The easiest and most affordable way to invest globally is through international exchange-traded funds (ETFs) that track foreign stock markets while trading conveniently on U.S. exchanges. These funds give investors diversified exposure to companies across Europe, Asia, and emerging markets, without needing a foreign brokerage or currency account.

Popular examples include:

• Vanguard Total International Stock ETF (VXUS): Tracks the FTSE Global All Cap ex U.S. Index, providing broad exposure to both developed and emerging markets outside the United States.

• iShares MSCI EAFE ETF (EFA): Focuses on large- and mid-cap companies in developed markets across Europe, Australasia, and the Far East, excluding the U.S. and Canada.

• Schwab International Equity ETF (SCHF): Offers low-cost access to developed markets outside the U.S., following the FTSE Developed ex-US Index.

All three ETFs trade in U.S. dollars and can be purchased through any major U.S. brokerage platform, such as Charles Schwab, Fidelity, or Vanguard. They automatically handle foreign currency conversion and dividend distributions, simplifying global investing.

Most international ETFs are unhedged, meaning your returns are influenced by both foreign stock performance and currency movements. For investors who want to minimize currency risk, hedged options like the iShares Currency Hedged MSCI EAFE ETF (HEFA) provide exposure to the same markets while neutralizing exchange-rate fluctuations.

For most long-term investors, a broad fund such as VXUS or SCHF offers the simplest, most cost-efficient, and well-balanced path to global diversification.

2. Global Brokerages — Direct Access, More Control

If you prefer to buy foreign companies directly, several U.S. brokers make it simple to trade on international exchanges.

• Interactive Brokers offers access to over 150 global markets, including London, Tokyo, and Frankfurt, giving investors broad international reach.
• Charles Schwab Global Account supports direct trading in 12 major foreign markets, with transactions executed in local currencies while managing everything from a U.S.-based account.
• Fidelity International Trading provides access to roughly 25 countries’ exchanges, allowing settlement in either U.S. dollars or local currency for added flexibility.

You can open these accounts in the U.S., deposit dollars, and most brokers automatically handle the currency conversion when you place an order, though some may require converting to local currency first.

Advantages: You gain direct ownership of foreign shares, receive local dividends, and often retain voting rights, depending on the broker and market.

Trade-offs: Expect small FX conversion fees (typically under 1%), and note that some markets withhold taxes on dividends. U.S. investors can often claim a credit through the IRS Foreign Tax Credit program.

This route works best for investors comfortable with added complexity who want hands-on control and true global diversification.

3. ADRs — Foreign Stocks in U.S. Clothing

An American Depositary Receipt (ADR) is a U.S.-listed certificate representing shares of a foreign company. ADRs trade on major U.S. exchanges such as the NYSE and NASDAQ, allowing investors to buy international stocks in U.S. dollars without managing foreign brokerages or currency conversions.

Each ADR represents one or more (or sometimes a fraction of) the underlying foreign shares, which are held by a U.S. depositary bank. These banks handle currency conversion and dividend payments while ensuring compliance with U.S. reporting standards, making ADRs nearly as easy to trade as domestic stocks. Settlement occurs through U.S. clearing systems, even though the underlying shares remain in custody overseas.

Many leading global companies offer ADRs, including:

• Nestlé S.A. (NSRGY)

• Toyota Motor Corporation (TM)

• Novo Nordisk A/S (NVO)

• Unilever PLC (UL)

Because dividends are paid in U.S. dollars and trades clear through U.S. systems, investors gain international exposure with domestic convenience.

The trade-off is that not all foreign firms issue ADRs, and depositary banks often deduct a small annual ADR fee, typically just a few cents per share, to cover administrative costs.

Overall, ADRs offer a simple, cost-effective way to diversify globally through a standard U.S. brokerage account, combining global reach with the familiarity of trading U.S. equities.

What You Don’t Need

You don’t need a foreign bank account to start investing overseas. Major U.S. brokerages like Charles Schwab, Fidelity, and Interactive Brokers already provide compliant access to global markets. Through these platforms, investors can buy exchange-traded funds (ETFs) and American Depositary Receipts (ADRs) directly within the U.S. system.

These securities trade in U.S. dollars on regulated exchanges such as the NYSE and NASDAQ and fall under the oversight of the SEC and FINRA. ADRs represent shares of foreign companies held by U.S. banks, while international ETFs hold baskets of overseas stocks, both designed to make global diversification simple, secure, and tax-efficient from a standard U.S. brokerage account.

Opening a local brokerage or bank account abroad only makes sense if you want specialized exposure, such as small-cap stocks in Thailand or restricted frontier-market securities that aren’t available through U.S. listings. For the vast majority of global investable companies, especially large and mid-cap firms in developed and emerging markets, U.S.-based investment options are more than sufficient.

Fees, Taxes, and Currency

Before you invest globally, keep three essentials in mind: taxes, currency risk, and broker fees, each can quietly cut into your returns.

• Taxes: Most countries withhold 10–30% of dividends from non-residents. U.S. investors can often reclaim part through the Foreign Tax Credit under existing tax treaties.
• Currency risk: Returns on unhedged ETFs or foreign stocks move with the dollar. When the USD strengthens, your foreign gains shrink; when it weakens, they grow. Consider currency-hedged ETFs if you prefer stability.
• Broker fees: Global brokers like Interactive Brokers and Schwab Global Account charge small FX spreads (0.1%–0.5%) or access fees. Review your broker’s international pricing before trading.

Knowing how taxes, currency, and fees work keeps your global investing strategy efficient and tax-smart.

Which Method Fits You?

If you value simplicity and broad diversification, international ETFs are the best starting point. Funds like the Vanguard Total International Stock ETF (VXUS) provide exposure to both developed and emerging markets, all in one trade.

If you prefer to select individual global companies, open a global brokerage account through platforms such as Interactive Brokers, Charles Schwab Global Account, or Fidelity International Trading. These allow you to buy foreign stocks directly in their home markets.

For brand-name exposure with minimal complexity, consider American Depositary Receipts (ADRs). These U.S.-listed shares represent foreign companies such as Nestlé or Toyota and trade in dollars just like domestic stocks.

Most investors begin with a broad ETF like VXUS, then add ADRs or direct holdings later for more targeted exposure. Whatever route you choose, ensure your international investments align with your overall risk tolerance, goals, and time horizon.