Indexy a trhy
Investing in the USA: The World's Largest Market and How to Access It as a Czech Investor
Key takeaways
- The USA makes up the dominant portion of every global index — anyone holding an All-World ETF largely holds the USA.
- The technology sector is both the driving force and the largest source of concentration risk in the American market.
- UCITS ETFs on the S&P 500 or the entire US market are easily accessible for Czech investors through standard brokers.
- USD/CZK currency risk can be left unhedged, or managed by choosing a currency-hedged ETF share class.
- Concentration in a small number of mega-cap names is a real risk that changes continuously over time.
The US equity market is the largest and most liquid in the world — and for anyone investing in global equities, it forms the foundation. If you hold an All-World ETF, the USA is strongly represented in it. If you are looking for targeted exposure, you have access to a fund infrastructure tested over decades.
Economy and market: key facts about the USA
The USA is the world's largest economy with a robust domestic market, a deep capital base, and the dominance of the dollar as a reserve currency. The US equity market (NYSE + NASDAQ) includes thousands of publicly traded companies, but market capitalisation is dominated by a relatively small group of mega-cap firms, particularly from the technology sector. The main indices — S&P 500, NASDAQ 100, Russell 2000 — cover different market segments from blue chips to small caps.
You can find more about what the S&P 500 is and how it works in the article What is the S&P 500.
Key sectors and companies
Technology, healthcare, financials, consumer goods, and industrials are the five largest sectors by market capitalisation. The technology sector contains the largest companies in the world and is simultaneously the greatest source of volatility. Healthcare brings relative stability due to its non-cyclical nature. The energy sector is significant, but its weight in indices fluctuates with oil prices.
How to invest through UCITS ETFs
The following types of funds are available for Czech investors:
- S&P 500 ETFs — passively track the 500 largest US companies, low TER, enormous liquidity
- Total US market ETFs — include mid and small caps as well, broader diversification within the USA
- NASDAQ 100 ETFs — concentrated on technology, higher volatility and historical returns
- Currency-hedged share classes — EUR or CZK hedged variants for those who want to eliminate USD/CZK risk
All these ETFs are available in UCITS structure with Irish or Luxembourg domicile, which is key for tax treatment. More on why UCITS ETFs with Irish domicile in the article Why UCITS ETFs with Irish domicile. A comparison of All-World vs. S&P 500 can be found in this overview.
Risks you need to know
Four main risks when investing in the USA: Currency risk — USD/CZK movements can significantly affect the crown return regardless of the market's own performance. Concentration risk — a large part of the index is in the hands of a small number of companies, so index performance depends on those names. Valuation risk — the US market is historically priced higher than other regions, which may constrain future returns. Geopolitical and regulatory risk — regulation of the technology sector, trade policy, and geopolitical tensions can hit markets in the short term.
FAQ
Do I need to invest directly in a US ETF, or is a global fund sufficient?
It depends on your strategy. A global fund (All-World) automatically includes the USA as the largest portion — without any separate decision. A standalone US ETF makes sense when you want higher exposure to the US market than a global index provides.
How does taxation work when investing in the USA through UCITS ETFs?
UCITS ETFs with Irish domicile benefit from Ireland's favourable tax treaty with the USA (15% withholding tax on dividends instead of 30%). For a Czech investor, the standard income tax regime applies — gains from selling an ETF held for more than 3 years are tax-exempt (time test).
What is the NASDAQ 100 and how does it differ from the S&P 500?
The S&P 500 covers the 500 largest US companies across all sectors. The NASDAQ 100 includes the 100 largest non-financial companies listed on the NASDAQ exchange — it is therefore heavily technology-focused and exhibits higher volatility.