Go global for slice of Ap­ple pie

Ex­pand your hori­zons and in­tro­duce some off­shore stocks to your port­fo­lio, writes An­thony Keane

The Daily Telegraph (Sydney) - - Money Saver Hq -

GO­ING global with in­vest­ments is the eas­i­est and cheap­est it’s been, just as the world’s best-known com­pa­nies de­liver record re­turns.

From in­di­vid­ual stakes in Ap­ple and Ama­zon to in­vest­ment funds that spread your money across many com­pa­nies and coun­tries, new plat­forms are lin­ing up to sim­plify the process.

A num­ber of busi­nesses of­fer di­rect over­seas share trad­ing, while some in­vestors pre­fer di­ver­si­fied ex­change traded funds or pro­fes­sion­ally man­aged listed in­vest­ment com­pa­nies and man­aged funds.

“Tra­di­tion­ally, ac­cess­ing in­ter­na­tional mar­kets was quite dif­fi­cult,” said CMC Mar­kets head of stock­broking Andy Rogers, whose firm has launched in­ter­na­tional share trad­ing on its plat­form, with trades typ­i­cally cost­ing $19.99.

“Once you open an ac­count it’s ready for in­ter­na­tional – you can trade in 11 dif­fer­ent coun­tries but 80 per cent of the vol­ume we are seeing is to the US,” Mr Rogers said.

That’s be­cause the big guns – in­clud­ing Net­flix, Ap­ple, Mi­crosoft and Ama­zon – all call the US home, and many are brands that Australians use ev­ery day.

Fin­tech start-up Stake last month un­veiled a new app to al­low peo­ple to trade di­rectly in US shares with­out hav­ing to deal with piles of forms or pay bro­ker­age fees.

“It’s now sim­pler and cheaper than in­vest­ing lo­cally,” said Stake CEO Matt Lei­bowitz.

“There’s much more op­por­tu­nity over­seas – Aus­tralia is such a small per­cent­age of the mar­ket. When we launched last year we were cau­tiously con­fi­dent, but the user re­sponse has been in­cred­i­ble.”

Stake has more than 12,000 users and earns its in­come from for­eign ex­change trans­fers rather than ev­ery trade.

Set­ting up an ac­count takes less than 10 min­utes.

But while it’s eas­ier to trade, in­vest­ing in­ter­na­tion­ally re­quires ex­tra knowl­edge and skills. Di­ver­si­fi­ca­tion is vi­tal, and seek ad­vice if you are un­sure about any­thing.

Global shares spe­cial­ist PM Cap­i­tal’s in­vest­ment strat­egy has de­liv­ered re­turns av­er­ag­ing 19.8 per cent for the past five years, and CEO Paul Moore said in­vest­ing in­ter­na­tion­ally was “harder than peo­ple re­alise”.

“Peo­ple think they know more than they do. A lit­tle bit of knowl­edge can be dan­ger­ous,” he said.

“We have 30 years of do­ing this. I have been global all my life. Even if you take us out of the equa­tion, I would rec­om­mend re­tail in­vestors need a cred­i­ble man­ager.”

Su­per fund mem­bers usu­ally have about one-third of their money in global shares, but for self-man­aged su­per funds, it’s only about 10 per cent.

How­ever, the Com­mon­wealth Bank’s head of SMSF cus­tomers, Marcus Evans, said there was surg­ing in­ter­est in off­shore stocks.

“Australians have his­tor­i­cally ig­nored in­vest­ing over­seas be­cause the lo­cal mar­ket al­ways per­formed well – but that was be­fore the boom by US gi­ants such as Ap­ple, which this month be­came the first $US1 tril­lion com­pany,” he said.

“Along­side that has been the rise of the ex­change traded fund mar­ket.”

Th­ese in­vest­ments al­low peo­ple to own an en­tire stock in­dex – such as the US S & P 500 – in just one share.

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