Own­ing the JSE at a FRAC­TION of the cost

CityPress - - Business - BY MAYA FISHER-FRENCH

Are­cently launched trad­ing plat­form, easye­quities.co.za, al­lows you to in­vest in shares via frac­tional own­er­ship.

This means that in­stead of having to pay the full share price, you are able to in­vest the money you have avail­able and buy frac­tions of shares, mak­ing in­vest­ing in shares more ac­ces­si­ble to in­vestors with lower amounts to in­vest.

For ex­am­ple, Naspers is trad­ing at about R1 330, which means with R2 000, you could not even buy two shares in Naspers.

By buy­ing frac­tions of shares, you can still have ex­po­sure to large South African cor­po­rates, and you are able to di­ver­sify your in­vest­ment port­fo­lio with smaller in­vest­ment amounts.

A frac­tional share is a share of eq­uity that is less than one full share and usu­ally comes about as a re­sult of cor­po­rate ac­tions.

Frac­tional shares still earn div­i­dends, but do not carry vot­ing rights.

Be­cause frac­tional shares can­not be bought and sold on the stock mar­ket, they are usu­ally rounded up to a full share or set­tled in cash.

Fi­nan­cial ser­vices com­pany GT247.com iden­ti­fied the bar­rier to en­try this pre­sented to in­vestors look­ing to build a port­fo­lio of stocks with a small amount of cap­i­tal and cre­ated the EasyE­quities on­line plat­form, through which in­vestors can buy and sell full and frac­tional shares.

The costs are also lower than other trad­ing plat­forms, with a flat bro­ker­age fee of 0.25%. So, for a R2 000 on­line in­vest­ment, you would pay a bro­ker fee of R5, in ad­di­tion to reg­u­la­tory charges in­clud­ing Strate (R10.92), VAT (R2.23) and se­cu­ri­ties trans­fer tax (R5).

The to­tal cost for a R2 000 trade would be R23 – well be­low the R75 to R100 min­i­mum charged by most bro­ker­ages.

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