How to buy international shares in Australia (2024)
Give your stock portfolio an international edge (and a chance to find the next Nvidia).
Key takeaways
- Online share trading platforms mean it's never been easier (or cheaper) to buy global stocks.
- Many of the world's most popular stocks are only available on global exchanges (think US giants like Apple, Microsoft and Amazon).
- Keep an eye on additional fees (like currency conversion) when buying international shares.
Want to invest in the top global stocks but don't know where to start? You're not alone.
While 83% of Australians have bought Australian stocks, less than 30% have invested in US stocks, and only 6% have invested in UK stocks, according to Finder research.1
Thankfully we're here to help take you through the process of buying international shares (and everything else you'll need to be aware of).
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How can I invest in global markets?
There are 3 main ways that you can get exposure to global shares from Australia:
- Invest directly in shares listed overseas, such as Meta and Apple, by using a broker with an international share trading platform.
- Buy a global-themed exchange traded fund (ETF) or managed fund that tracks the performance of international stocks (like an S&P 500 ETF).
- Trade CFDs (contracts for difference) that track global shares. (Note: This isn't the same as buying shares directly. CFDs are advanced trading instruments and come with more risk.)
Step 1: Compare brokers that offer global stocks
If you want to buy international shares, you'll need to find a broker or trading platform that gives you access to foreign markets. Naturally, not all trading platforms are created equal.
Here are the 5 key features to keep in mind when choosing an international broker:
Access to markets.
Make sure when you are buying international shares that your broker actually offers access to the stocks you want to buy. This sounds obvious but signing up to a foreign broker won't automatically gain you access to all international markets.
The big ones are the US exchanges like the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotations (Nasdaq), which most providers will allow you to access, but not every account will let you trade everywhere in Europe and Asia.
Brokerage fees.
How much will it cost you to buy shares and ETFs from global exchanges? Confirm if it's a flat fee or a percentage fee and if the fee is the same across all markets.
For example, CMC Invest offers $0 brokerage on US, UK, Japanese and Canadian stocks, but then has high brokerage on other global exchanges ($59.95 per trade). So while it might be a good choice for investors looking to buy US stocks, it might not be the best option for those wanting to invest in European markets.
Currency conversion fee.
A key difference between trading Australian and global stocks is that most platforms will charge you some form of foreign exchange fee when you purchase shares from international exchanges.
This will also be true of platforms that offer free brokerage. In fact, brokers that charge $0 commission will often charge a higher foreign exchange (FX) fee.
Trading hours.
Many platforms now offer trading access outside of regular trading hours (including pre-market and after-market), which can be handy when you're looking to trade on exchanges that operate in a different time zone to Australia, like the US and European markets.
Research tools.
What investment research tools are available? Are you seeing real-time market information or is there a delay? Are the research tools free to use or do they cost extra? It's a lot easier to buy low and sell high when you've done your research, especially on markets and stocks you might be less familiar with.
What's the best trading platform for buying international shares?
According to data from the 2024 Finder Share Trading Awards, Interactive Brokers is the best platform for global stocks because of its impressive range of global markets and competitive fees.
CMC Invest was ranked second for best global stocks platform thanks to its $0 brokerage on US, Canadian, UK and Japanese stocks, while Saxo Invested ranked third due to its support for more than 50 global stock exchanges.
Step 2: Open your account
Once you've decided on an online broker, you'll need to open your share trading account.
To open an international share trading account, you'll generally need to meet the following eligibility criteria:
- Be 18 or over
- Have an Australian residential address
- Have a mobile number
As part of the application process, you'll also typically need to provide the following:
- Personal photographic identification (such as your driver's licence, passport and/or proof of age card)
- An Australian business number (ABN) and/or tax file number (TFN), if applicable
When opening the account, you'll be asked if you'll be trading as an individual, with a joint account (for example, with your partner), as a company or organisation or on behalf of a trust, like a self-managed super fund (SMSF).
Because share trading has income and tax implications, you must provide details of your income and occupation. Along with your personal information, you may be required to disclose the source of your income and the origin of your financial position.
After you've provided your personal details, you're up to the account set-up stage.
This involves providing the details of your linked bank account, setting up financing options if applicable and choosing from the various options that may be available. Once you've confirmed everything and double-checked your details, you're ready to load your cash management account and start trading.
Already have a share trading account?
Sometimes, providers will require that you open an account for local shares and a separate account for international shares. Since you're already signed up to the broker, most of your information will already be saved, meaning buying international shares should be a simpler process.
Did you know: Recent Finder research found that the average share trader could save approximately $1,048 in brokerage fees a year by switching to a more suitable online broker (calculated on 7 trades per month of $1,000). You might even save money by having more than 1 platform, especially if you are investing in Australia as well as internationally.
Step 3: Fund your account by depositing AUD
If you want to start trading, you'll need to make sure you have enough funds in your linked account to execute the trades, plus any broker fees that will apply.
Most trading platforms support deposits via bank transfer or card, but beware that certain deposit methods may come with additional fees.
Once your Australian dollars have been deposited, you'll either be able to trade directly using your AUD, or first convert some of it into the relevant foreign currency before you can buy international stocks.
Remember that when you transfer funds into your linked foreign currency account, you'll usually have to pay a currency conversion fee.
It can take a few days for your funds to be loaded into the cash account, so keep this in mind when you decide you'd like to make a trade.
Step 4: Search and select the shares you want to invest in and start trading
Once you've set everything up, you can trade online through your new international share trading account.
Expect to see a dashboard with features such as current share prices and changes over time and options to buy, sell or research.
With the big banks and other trading accounts geared towards beginners, you may find tutorials and introductory material to help acquaint you with the available features.
Finder survey: Which countries have Australians bought overseas stock in?
| Response | |
|---|---|
| Australia | 83.23% |
| US | 29.94% |
| UK | 5.39% |
| China/Hong Kong | 4.79% |
| Other | 4.79% |
| Canada | 3.59% |
| Europe (EU) | 3.59% |
| Japan | 3.59% |
| NZ | 2.99% |
| Singapore | 2.4% |
| India | 1.5% |
| Africa & Middle East | 0.3% |
Source: Finder survey by Pure Profile of 1145 Australians, December 2023
International stock trading platforms
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Disclaimer: General information only. All forms of investments (and in particular, trading CFDs, commodities and forex) carry significant risk, including the risk of losing more than the invested amounts, market volatility and liquidity risks. Past performance is no guarantee of future results. Such activities are not suitable for most investors.
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Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.
Why buy international shares?
Simply put, international shares allow you to diversify your portfolio and also give you access to some of the biggest (and best-performing) companies in the world.
Many of the household names that you would be familiar with, such as Google, Apple, Tesla, McDonald's, Ford, Unilever and Nvidia, are foreign-owned and listed overseas despite their prevalence in Australia.
All of these businesses are listed on either the S&P 500, the Nasdaq Composite or the Dow Jones.
Of course, US stocks are only one (admittedly pretty big) piece of the international pie.
Australian markets account for only 2% of global trade and if you exclusively focus on buying Australian shares, you're potentially over-exposing yourself to Australia's economic fortunes.
For example, if Australia goes into a recession that does not impact the rest of the world, your exposure will be negatively impacted compared to an investor who buys shares in both Australia and in overseas markets.
Despite the massive opportunities overseas, there is still a myth that investing overseas from Australia is more time-consuming and expensive.
In fact, it is the complete opposite, with the cheapest brokerage and smaller minimums often being on foreign brokers.
Expert insight: Why investors are looking to the US and other global markets
"Investors still have a bias for investing via the local market. However, they are increasingly gaining exposure to the US. The US' leadership on themes including AI contributes to the fact that it continues to attract most of the world's high profile listings."
What's the difference between Australian and international share trading?
Australia
The Australian share market is made up of businesses listed on either the Australian Securities Exchange (ASX), the National Stock Exchange (NSX) or the Chi-X.
While not every business has to operate in Australia to list here, the majority do. Investors on the ASX trade between 10am and 4pm (Sydney time), Monday to Friday, with Australian investment options overall making up around 2% of the global trade.
International
You can trade shares from global markets around the world 24 hours a day, subject to local market hours. You'll gain access to more options, but you'll also experience new risks and challenges.
International stock exchanges include the London Stock Exchange (LSE), the NYSE, Nasdaq and many others.
Pros of buying international shares
- Gain access to a wider variety of investment options.
- Most of the largest companies in the world trade on foreign markets.
- Gain exposure to different economic forces and protect yourself against downturns in the Australian market.
- You can trade 24 hours a day rather than only within set business hours in your country.
- When trading internationally, there may be a larger pool of investors, so you might find it easier to find a buyer for your shares.
Cons of buying international shares
- Exchange rates can fluctuate and can significantly hurt (or help) your return on investment.
- Foreign policy can affect your returns. It's possible that changes to another country's foreign policies, local instability or other issues can impact the value of your investment in ways beyond your control. This is a largely uncontrollable risk.
- Taxation and related issues may be more complicated when trading international shares.
- Added costs including foreign exchange fees and levies.
Our expert says: 3 extra tips to get the most from your trading
"Making big trades?
Look for lower exchange rates, research tools that allow you to make more reliable investments and flat broker fees rather than percentage rates. Where applicable, it may be worth accepting higher flat fees in exchange for lower percentage rates. Avoid low maximum limits that might constrain your trading.
Making a lot of small trades? You may want to avoid flat fees that take a big chunk out of the potential profits of each trade and stick to percentage rates that will cost you less. Low maximums are less of an issue, but high minimums might be a problem.
How will you diversify your portfolio? Not all accounts will give you the same options. Plan what kind of trades you want to make and consider whether a given account will let you trade CFDs, whether you can trade ETFs and if you are able to do forex trading through the same platform."
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Important information: Powered by Finder.com.au. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.
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