How to Invest in Spain

Competitive Economy

The economy of Spain is primarily focused on services (74.2%), industry (23.2%), and agriculture (2.6%). Within these sectors, the country hosts many large multinational companies, including the renewable energy company Iberdrola and telecommunications companies such as Telefonica and Movistar.

Investing in Spain Using ETF Funds

The easiest way to invest in Spain is by using international ETF funds, which provide instant diversification in trading securities in the United States. By owning a diversified portfolio of companies spanning many industries, investors do not need to worry significantly about concentration risk or buying and selling a portfolio of individual stocks. However, the trade-off is that these funds impose a moderate expense ratio, which can reduce the overall return over time.

Investing in Spain Using ADRs

American Depositary Receipts or ADRs are another easy way to invest in Spain without the need to open a foreign brokerage account. These securities are directly linked to a basket of foreign stocks and trade on U.S. stock exchanges, meaning that investors do not need to worry about the tax implications of foreign capital gains. Additionally, many of these funds also trade on national exchanges such as the New York Stock Exchange, which may be more liquid than over-the-counter markets.

Conclusion

Spain has increasingly become a popular investment destination. Although it was affected by the COVID-19 pandemic, its economy seems poised for a quick recovery and continued growth. Before the pandemic, it was one of the fastest-growing economies in Europe, and international investors may want to take a closer look at this previously struggling economy. Spanish ETF funds and ADRs are the easiest ways to invest in the country without dealing with the hassle of opening a foreign brokerage account and paying taxes. By keeping these tips in mind, international investors can build their exposure to this promising economy in their portfolios.

Source: https://www.thebalancemoney.com/how-to-invest-in-spain-4045661