How to Buy US Treasuries in Europe

Can I Buy US Treasuries in Europe?

Yes, European investors can buy US Treasuries, including bonds, bills, and ETFs. Regulated European brokers offer these assets under EEA financial guidelines, enabling seamless access to US government debt. Payment options include IBAN, bank transfers, and debit cards, making it easy for European portfolios to capture the stability and yield of Treasuries.

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How to Buy US Treasuries in Europe

To invest in US Treasuries from Europe, consider using a trusted platform like eToro, backed by over 30 million investors globally. Known for its compliance standards and broad asset support, eToro provides access to more than 4,500 assets, including Treasury ETFs like SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and iShares 1-3 Year Treasury Bond ETF (SHY).

Here are the steps to investing in US Treasuries as a European:

1. Account Registration: Sign up on eToro and complete identity verification.
2. Deposit Funds: Select ‘Deposit Funds’ and add Euros (EUR) using European-friendly payment methods.
3. Payment Method Selection: Choose EUR as the currency and use SEPA or wire transfers to fund your account from a European bank.
4. Choose Treasury ETF: Search for US Treasury ETFs that align with your investment objectives.

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Best US Treasuries for European Investors

For European investors eyeing US Treasury ETFs, here are the top picks for October 2024, each offering a unique way to balance yield and duration risk.

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SPDR Bloomberg 1-3 Month T-Bill ETF (BIL)

BIL keeps it simple with short-term Treasury Bills, yielding 4.68%. This ETF is a prime choice for the risk-averse who want stability and liquidity. It closely mirrors the 1-3 month T-bill rate, adapting fast to rate changes. Think of it as a safe place to park cash with minimal exposure to market swings.

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iShares 1-3 Year Treasury Bond ETF (SHY)

SHY steps it up slightly, focusing on 1-3 year bonds and offering a 3.46% yield with moderate rate sensitivity. It’s a solid option for those looking to earn more than cash alternatives without diving into long-duration risk. SHY keeps inflation at bay while adding a layer of return over ultra-short-term options.

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iShares 20+ Year Treasury Bond ETF (TLT)

TLT goes all-in on long-term Treasuries with a 3.98% yield but at the cost of higher volatility. This ETF is for investors with patience and a higher risk tolerance, ready to ride out the ups and downs for potentially stronger returns. TLT works well for those who see value in locking in rates now with an eye on future rate cuts.

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Vanguard Intermediate-Term Treasury ETF (VGIT)

VGIT strikes a middle ground, holding mid-term Treasuries that yield 3.87% and offer a balanced approach to duration risk. It’s a versatile pick, fitting nicely as a core holding for those who want steady income without the extremes of short- or long-term bonds.

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US Treasury Investing Fees

Trading US Treasury ETFs through European brokers involves several fees, and understanding these costs is essential. Here’s a quick breakdown of what to consider:

1. Commission: Most brokers charge a commission, which can range from 0.1% to 1% depending on the platform and account type.
2. Currency Conversion Fees: For trades not in USD, brokers typically apply a currency conversion fee.
3. Market Spread: Trades involve a spread, the gap between the buy and sell prices, indirectly affecting transaction costs.
4. Overnight Holding Fees: Leveraged positions held overnight incur a daily fee, often based on the 1-month USD LIBOR rate.
5. Weekend Fees: Positions held through weekends may incur triple the overnight fee, usually applied on Fridays.

Each ETF also has its own expense ratio, which is an annual fee, expressed as a percentage of your investment, that covers fund management costs.

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Bottom Line

Investing in US Treasuries from Europe is simple and flexible, with options across short, mid, and long-term ETFs to suit various risk appetites. European investors can easily access these assets through regulated brokers, offering a stable income source backed by the US government. 

Just factor in the platform fees, currency conversion costs, and each ETF’s expense ratio to get a clear view of costs.