International Share Trading - October 1st
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International share trading platforms allow you to access overseas exchanges and buy and sell shares from some of the biggest companies in the world. According to ASIC, Australian securities only make up around 2% of the global market, so by trading international shares, you can have a much wider range of investment options.
Canstar rates international share trading platforms using a sophisticated ratings methodology that compares both price and features.
To be considered within the Canstar International Share Trading Star Ratings, the provider must:
The price score is based on 100 hypothetical trades in the US and accounts for any ongoing fees, brokerage costs and foreign exchange costs.
The price score is worth 50% of the final rating.
The feature score accounts for the remaining 50% of the total score and takes into consideration a number of features from seven different categories:
Products are ranked based on the total score received for each profile. Stars are then awarded based on the distribution of the scores with the objective to award the top 5-10% of products with a 5-Star rating.
Canstar endeavours to include the majority of product providers in the market and compare the product features most relevant to consumers in our ratings. Complete market coverage is not always possible and some products or features may not be included.
In total, Canstar rated 18 products offered by 12 providers of international share trading platforms in 2020:
To directly trade international shares in Australia legally, you must use a broker. Many online share trading platforms and brokerage firms in Australia provide access to international trading.
Buying international shares can be more expensive than buying shares on the Australian Securities Exchange (ASX), with additional costs such as currency conversion fees and foreign security custody fees.
Although the requirements can vary slightly depending on the platform, you generally need to:
To apply for a new international share trading platform, you’ll need the following documentation:
If you’re applying in the name of a company or trust, you need:
Once you have an account, making trades for international shares isn’t really any different to buying Australian shares. Again, this may depend on your choice of provider, but generally, all you need to do is:
The right international share trading platform can give you access to dozens of different international exchanges, including:
Having access to these exchanges not only allows direct investment in shares, but can also enable the purchase of Exchange Traded Funds (ETFs), Exchange Traded Options (ETOs), managed funds, contracts for difference (CFDs) and other derivatives. The brokerage and fees charged can vary between securities.
Depending on your circumstances, you may be subjected to foreign taxes on investment income from international shares. You may also be eligible for a foreign income tax offset from the Australian Tax Office (ATO). Seek professional advice for more information.*
*Canstar is not a registered tax agent and does not provide tax advice.
