1: What stocks can I trade internationally, and on what markets?When you sign up for international trading, most common stocks and exchange-traded funds (ETFs) listed in the following markets will be available to trade online: MarketCountry Code AustraliaAU AustriaAT BelgiumBE CanadaCA DenmarkDK FinlandFI FranceFR GermanyDE GreeceGR Hong KongHK IrelandIE ItalyIT JapanJP MexicoMX NetherlandsNL New ZealandNZ NorwayNO PolandPL PortugalPT SingaporeSG South AfricaZA SpainES SwedenSE SwitzerlandCH United KingdomGBOther types of exchange-listed securities such as rights, warrants, or different classes of stock (e.g., Class A, Class B) may not be available. Security type availability is subject to change without notice. Order Details International orders can be entered at any time but will only be eligible for execution during the local market hours for the security. International orders are limited to common stocks with the following order restrictions:
For more on placing orders and order types, see the Trading FAQs. Finding an international stock’s symbol will likely be your first step to obtain a real-time quote, research a company, or trade an international security. On the International Stock Trading page, go to Find Symbol and enter the company name, SEDOL (similar to US CUSIP), and you’ll receive the following: International stocks use a different symbology than domestic stocks. To quote, research, or trade international stocks, enter the stock symbol, followed by a colon (:) and then the two-letter country code for the market you wish to trade in. For example, the company Fiat SPA Torino in Italy would trade under symbol F:IT for its ordinary shares. In Germany, it would trade under symbol FIAT:DE. This symbology can only be used to buy or sell stocks on the international trade ticket.
Quotes Real-time quotes1 are available for international stocks using the Get Quote Tool along the top of Fidelity.com or within your International Stock Trading page. Although the real-time primary market quote is displayed, international orders may execute on the primary exchange, or they may execute on ECNs, ATSs or regional exchanges within the market. Primary ExchangesMarket Primary exchange AustraliaAustralian Stock ExchangeAustriaVienna Stock ExchangeBelgiumEuronext Brussels Stock ExchangeCanadaToronto Stock Exchange or Ventures Stock ExchangeDenmarkOMX CopenhagenFinlandOMX HelsinkiFranceEuronext Paris Stock ExchangeGermanyFrankfurt Stock ExchangeGreeceAthens Stock ExchangeHong KongHong Kong Stock ExchangeIrelandIrish Stock ExchangeItalyItalian Stock ExchangeJapanTokyo Stock ExchangeMexicoMexican Stock ExchangeNetherlandsEuronext Amsterdam Stock ExchangeNew ZealandNew Zealand Stock ExchangeNorwayOslo Stock ExchangePolandWarsaw Stock ExchangePortugalLisbon Stock ExchangeSingaporeStock Exchange of SingaporeSouth AfricaJSE Limited (Johannesburg Stock Exchange)SpainBolsa de Madrid (Madrid Stock Exchange)SwedenStockholm Stock ExchangeSwitzerlandSwiss ExchangeUnited KingdomLondon Stock Exchange Where and How to Buy Foreign StocksFor years the financial planning experts have been lecturing you to put 20% or 30% of your portfolio abroad. Buy international stock funds, they say. You get diversification you can’t get in an all-U.S. fund.
I have a radical variation on this proposition. You shouldn’t own international funds. You should buy individual foreign stocks instead. A decade or two ago, only the most daring and cosmopolitan of investors bought shares of foreign companies. You had to tangle with currency conversions, creaky settlement procedures and incomprehensible annual reports. It’s a very different marketplace today. There has been a proliferation of ADRs (American Depositary Receipts), meaning no currency costs and shares accessible with your usual $8 or $9 commissions for domestic trades. If your chosen stock doesn’t have an ADR your broker can probably get it for you on a foreign bourse at a tolerable commission cost. The shareholder report you want is probably going to be in English and available with a mouse click. Why individual shares rather than funds? Two reasons: lower costs and lower taxes. Buying individual shares saves you fund fees and allows you to harvest losses for the tax deductions. I’m assuming the money you have set aside for foreign investing is outside your 401(k) or other retirement plan. If all of your savings are tucked away in tax-deferred retirement accounts, then read no further. My tax-minimizing strategies for foreign shares won’t do you any good. But if you have some money inside a retirement plan and some outside, then taxes are worth thinking about. And if you have some money in stocks, some in fixed income (bonds, CDs and so on) then you should apply the first rule of tax-wise investing: Put bonds in the retirement account, stocks in the taxable account. Suppose you have $100,000 in international stock funds inside your 401(k) and $100,000 in CDs outside. You could enhance your future wealth by doing a switcheroo. When the CDs mature, invest the money in foreign stocks. On that same day log into your 401(k) account and sell the stock funds, using the proceeds to buy a fixed-income investment (like a Ginnie Mae fund). I am sometimes baffled by how many investors get this basic allocation decision wrong. They think of stocks as long-term investments and they think of retirement accounts as long-term. So they put their stocks in their tax-sheltered account. They want the CDs outside, to be available for unexpected bills. End result: higher taxes. You can do the switch without changing your overall allocation (risky stocks versus safer fixed income). There’s no reason why your stock portfolio can’t do double duty as long-term investment and short-term emergency reserve. You suddenly need $30,000 to replace a car? Sell $30,000 of stocks. If the stocks are actively traded, the sale will cost you all of $50 in brokerage commissions and bid/ask spreads. With or without a need for cash, it is wise to cull out losers every now and then from a taxable stock account. Claim the capital loss deductions and reinvest in similar stocks. Capital losses can shelter gains from various sources (like capital gain distributions from mutual funds) and can also be deducted at up to $3,000 a year from ordinary income like salary. With international investing there’s another reason to keep stocks outside your retirement account: It’s the only way to claim the foreign tax credit. That credit in effect recoups money clipped from your overseas dividends by foreign governments. Inside a 401(k) or IRA those foreign tax payments would be lost forever. Tax-exempt entities can’t claim foreign tax credits. With $100,000 invested in Europe, you might have $500 a year that can be claimed, dollar for dollar, against your federal tax bill. There are complicated limits to foreign tax credits but they probably won’t apply to you. How to pick the stocks for your do-it-yourself international fund? Knock off a fund that doesn’t trade very much. You’ll be following a published portfolio that is a few months stale, but there’s no great harm in that if the fund in question tends to sit on holdings for years at a time. Here’s a simple, passive-aggressive way to invest abroad. Go to Vanguard’s site to get the holdings of its European index fund. Buy every other one of the top ten holdings, then an assortment of the smaller companies selected so that you get diversification in countries and lines of business. You could do the same with Vanguard’s Pacific index fund. In Europe you would start with Shell, HSBC, BP, Roche and Glaxo and then work your way down the list. For the smaller companies you’d go light on oil and drug companies. Another approach: look at a successful fund that has a fairly low turnover. I’m an admirer of the value-style investors at Tweedy Browne, whose Global Value fund has delivered a 10% annual return since it started 18 years ago, double that of the comparable MSCI index. I asked Tweedy principal Thomas Shrager for some tips. He likes Roche, whose prescription drug profits are not as vulnerable to patent expirations as those of Pfizer or Lilly. Tweedy’s portfolios have more Switzerland and more pharma in them than you’ll find in index funds. Beer is another Tweedy theme. One of its favorite brewers is the Dutch firm Heineken. You can get shares for euros in Amsterdam or for dollars as an ADR in New York. In institutional accounts Tweedy generally holds foreign shares. In its separately managed accounts for wealthy U.S. investors it usually prefers the ADRs. For more on the tactical distinction, see this trading guide. Is it risky to venture abroad? Sure. Greece could suck the continent into a default vortex. China’s bubble is waiting to burst. Even if stock markets overseas hold up, a rise in the exchange value of the dollar would make you poorer. But it’s risky to stay at home, where the government is paying for its grand schemes by printing $100 bills. Some of the stocks you buy may go down. If that happens, it’s nice to have the IRS share your pain. That’s what loss harvesting is all about. If you only buy stocks that go up, the loss harvesting strategy won’t do you any good. That is a nice problem to have. |
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