/ 3 May 2011

Owning your own global shares

Navisha writes: I am interested in investing in foreign listed companies like Apple, Disney and Berkshire Hathaway. Please can you advise which investment platform I could use to invest directly in these shares without purchasing them indirectly via an index tracker or unit trusts?

I would be looking to invest R100 000. I have seen that PSG offers asset swaps which I intend reading about a little more but I was wondering if one can invest directly in blue chip shares on the London or New York Stock exchange just as one would on the JSE for example, via Standard Bank online trading or FNB?

Maya replies: Unfortunately local lower cost online brokers like Standard Bank and FNB only deal in local shares.

The JSE offers International Derivatives (IDX) which allows South African investors to trade derivatives on companies like Berkshire Hathaway, Vodafone, Nokia and Bank of America in rands. However you would be holding a derivative not the actual share and is not advisable for long-term holdings. Only experienced investors or investors with the help and advice of an experienced adviser should participate in this market.

Simon Brown of online investing university justonelap.com says the best option would be to invest directly with a discount broker in the United States. One would need a tax clearance certificate, then open the account and transfer money.

Alternatively, Brown says if you are looking for a local broker to manage both local and international portfolios he recommends vestact.com.

Brown says the PSG and Sanlam iTrade options both offer some international trade but it still requires tax clearance. It is not cheap and the minimum investment is around $10 000 per trade, so you would only have exposure to one share.

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