Kiwi broker Sharesies launches 1 cent ASX share trading in Australia

Posted: 15 April 2021 10:18 pm
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Using mobile phone.

The Kiwi-based app lets you invest your pocket change into Australian, New Zealand and US stocks.

For the first time, Australians have the option to invest just a few dollars at a time into Aussie shares, thanks to the arrival of a new Kiwi platform. Chur!

Popular New Zealand online broker Sharesies officially launched today in Australia in a market first for ASX investors. Sharesies is the first broker in Australia to offer US, New Zealand and Australian shares, with no minimum investments.

So, if you wanted to, you could invest just a single cent into Afterpay or Google, if that's what floated your boat.

Until now, Superhero, which launched last September, offered the lowest minimum investment for ASX shares at $100 increments.

Available markets on Sharesies include:

      • Australian Securities Exchange (ASX)
      • New Zealand's Exchange (NZX)
      • NASDAQ
      • New York Stock Exchange (NYSE)
      • Chicago Board Options Exchange (CBOE)

Shaking the market

Since Sharesies' launch in 2017 in New Zealand, the platform has built up a customer base of around 320,000 customers and $1 billion in funds under management.

Its co-founder Brooke Roberts said part of what has made the app so attractive is its accessibility to people from all walks of life.

"It goes back to that deep understanding of what people want," she told Finder. "When you remove those barriers, you create a platform that feels like it's for everyone."

Roberts said she and the five other co-founders brainstormed the idea four years ago when there was a lot of hype around millennials being locked out of the property market.

"Obviously the same sentiment is still there, and we're thinking that there's no reason that people shouldn't have the opportunity to grow their wealth. Why shouldn't somebody with $5 have the same opportunity as someone with $5 million?"

She said part of their goal was also to demystify the investment process, so that even if you have no understanding of how it works, you can feel comfortable enough to learn as you go.

Fractions of shares

By removing any minimum investment, Sharesies is the first broker to let you buy fractions of Aussie shares rather than whole shares.

"No matter what you want to invest in, you can invest from as little as one cent. So that equalises the playing field," said Roberts.

"Fractional investing" until now has only been possible with US shares on specialised apps such eToro, Stake and Interactive Brokers.

Essentially it means that you can invest dollar amounts into a stock. For example, instead of buying one Google stock for $1,500 or two for $3,000, you could buy one-tenth of a stock for $150.

"It also enables you to build portfolios with dollar amounts, rather than individual stocks in mind," said Roberts.

With Sharesies you can buy fractions of US, New Zealand and Australian stocks from the one account.

Do you own the shares?

Yes, but not in the way you might ordinarily.

Normally when you buy shares listed on the Australian Securities Exchange (ASX), you need to invest a minimum of $500 per company. In return you get a holder identification number (HIN) from the ASX and your ownership of that stock is recorded by the exchange on its registry (called CHESS).

To avoid the minimum $500 investment, Sharesies uses one HIN for all investors. Your investments and share ownership is held and recorded by Sharesies in a trust.

It's not the first broker to do this. In September last year, Superhero was the first to break the $500 mould by offering $100 investments into ASX shares using a single HIN custodian model.

In a custody model like this, you're the "beneficial" share owner, which means you get all the monetary benefits including dividend payments, but you might not get voting rights.

Looking for a low-cost online broker to invest in the stock market? Compare share trading platforms to start investing in stocks and ETFs.

Disclaimer: 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 all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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