The appeal of diversifying your investment portfolio with international stocks has increased in recent years, thanks to the performance of global equities and the allure of the Magnificent Seven. However, it’s important to consider the additional costs associated with buying and selling international shares when choosing the right platform for your portfolio.
### Dealing charges
While some platforms like Freetrade, Halifax Share Dealing, iWeb, Trading 212, and Bestinvest offer free international trading, most platforms charge a dealing fee on such transactions. These fees can range from £5 at AJ Bell to £10 at Charles Stanley, with some platforms offering different rates for different markets. For example, trading US shares is usually cheaper than trading shares in other international markets. It’s essential to consider these fees when deciding whether to pick individual stocks or opt for investment trusts or funds, especially for markets that may be harder to navigate without local expertise, such as Asia.
### Foreign exchange fees
In addition to dealing charges, foreign exchange costs can add to the expense of buying and selling international stocks. Platforms often charge a foreign exchange fee on top of dealing fees, with rates varying from platform to platform. Some platforms offer tiered options for foreign exchange fees, becoming cheaper for larger transactions. It’s crucial to be aware of these fees, as they can significantly impact the overall cost of trading international stocks.
### Market access
The range of markets available on different platforms can vary significantly. Some platforms only offer access to US shares, while others allow you to invest in multiple markets across different countries. The best platform for you will depend on your investment style, the amount you wish to invest, how frequently you plan to trade, and the markets you want access to.
When comparing platforms, consider both dealing fees and foreign exchange fees to determine the most cost-effective option for your investment needs. Platforms like Trading 212, AJ Bell, and Interactive Investor are recommended for their competitive fees and wide range of international stock options. Additionally, be sure to factor in annual platform fees when making your decision.
By carefully considering these factors and choosing the right platform for your international trading needs, you can effectively diversify your portfolio and take advantage of opportunities in global markets.