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eToro extends commission-free trading in US stocks to the Asia-Pacific
INVESTMENT platform eToro on Monday announced that it is extending its commission-free stocks offering to clients in the Asia-Pacific, effective immediately.
The zero-commission offering for Asia-Pacific clients applies to all stocks on its platform that are traded on the Nasdaq and New York Stock Exchange (NYSE).
The company said it believes this makes eToro the first platform to offer commission-free stocks and fractional shares globally. Most brokerages and trading platforms in Singapore charge a small fee for trading in US stocks and exchange-traded funds (ETFs).
For instance, at iFast Corporation, the commission fees for trading in US stocks and ETFs are 0.08 per cent, subject to a minimum of US$8.80. For regular savings plans (RSPs) in US ETFs, the commission fees are 0.08 per cent, subject to a minimum of US$1. Investors can therefore start investing in an RSP from US$50.
Several brokerages, such as Phillip Securities, UOB Kay Hian and CGS-CIMB, declined to comment on their fees for trading in US stocks, or demand for the product.
Yoni Assia, co-founder and CEO of eToro, said: "eToro was founded with the goal of opening up financial markets to all. We hope that by offering commission-free investing for the most frequently bought stocks on eToro, more people will start investing."
The move to zero commission on all stocks on eToro that are traded on the Nasdaq and NYSE exchanges removes one of the main barriers to entry for many investors - costs, the firm added.
By offering fractional shares, the eToro platform allows investors to buy as little as 0.001 of a share, enabling users to diversify their portfolio with stocks that they otherwise might not be able to afford. Investors can open a position on the most popular stocks without commission from as little as US$50.
Stocks traded on the Nasdaq and NYSE exchanges are the most popular stocks on the eToro platform. They currently represent 82 per cent of all stocks traded on eToro globally.
The Asia-Pacific is one of eToro's fast-growing markets. In the first four months of 2020, the platform has seen a more than 400 per cent increase in users from the region investing for the first time, compared to the same period last year.
Jasper Lee, managing director of Asia, eToro, said the commission-free stocks offering is the next step in the company's expansion in the Asia-Pacific.
eToro introduced commission-free stocks in Europe and the UK in May last year. Investment in stocks has tripled on the platform globally in the first quarter of this year, compared to the last quarter of 2019.
In addition to zero-commission stocks, eToro does not levy ongoing administration or quarterly charges. The zero-commission fee structure does not apply to short or leveraged trades.
eToro now has more than 13 million registered users from over 100 countries. The platform enables people to invest in assets such as stocks, commodities and cryptoassets.
Users can also choose how they invest - they can execute a trade themselves, copy another user, or invest in a portfolio. Copy trading, where traders can observe the trading activity of other people and imitate them accordingly, is another function that is new to the brokerage scene in Singapore.