Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.
How to invest in US stocks from New Zealand
Find the best platforms and cheapest brokerage fees to help you trade US shares from New Zealand.
If you want to invest in shares, you don’t have to limit your portfolio to New Zealand securities. There are plenty of online trading platforms that give you access to many major international stock exchanges, including the New York Stock Exchange and the NASDAQ in the USA.
This guide explains the different ways you can invest, the pros and cons of investing in US shares, and how to find the best US share trading platform for your needs.
Hatch
- Trade over 3,900 US-listed companies and ETFs
- No subscription fees and just $3 USD to buy and sell shares
- Join more than 85,000 Kiwis who invest with Hatch
- 100% Kiwi owned and backed by Kiwi Wealth
Want to invest in US shares from New Zealand?
What's in this guide?
How to buy US shares: Quick guide
1. Compare online share trading platforms with access to US stocks
2. Open your account by providing your name, contact details and proof of ID
3. Fund your account by transferring money from your bank account
4. Search for and select the shares you want to invest in and start trading.
Not all brokers or trading platforms provide access to global stock exchanges, so if you want to buy and sell US shares, you’ll need to find one that offers the service for a cost-effective brokerage fee.
Why invest in US stocks?
There are many reasons for New Zealand investors to own stocks listed in the US. The New York Stock Exchange and the NASDAQ, both based in New York, are the two largest stock exchanges in the world in terms of market capitalisation, offering access to a diverse range of companies.
While trading on the NZX allows you to invest in roughly 200 companies and ETFs, trading on the US stock market offers access to over 3,500 investments.
A couple of decades ago, investing in global companies was a costly exercise. Today, many trading sites allow New Zealand investors to buy and sell shares not only in New Zealand but also in the US and other international markets.
This means you can access major global growth companies that aren’t available in New Zealand, such as the world’s biggest tech companies – Facebook, Amazon, Apple, Netflix and Alphabet (formerly known as Google) – the ‘FAANG’ shares.
The main downside of investing in US shares is the cost. Not only might you have to pay higher brokerage fees than you would if buying NZ shares, but you’ll also have to pay to convert NZD to USD. This currency conversion fee is wrapped up in the exchange rate the share trading platform offers – so check the current mid-market exchange rate to work out the markup.
How can I invest in US stocks?
You can invest in US shares through a broker or via an online share trading platform that provides access to US markets. However, not all of the options provided in New Zealand offer a US share trading feature. Before signing up to a new account or a broker, it’s essential to check which countries are on the books and what the associated fees are.
It’s also important to be aware that there are several different ways to gain exposure to US investments. These include:
- US shares. The most common way to invest in US companies is to buy and sell shares listed on the New York Stock Exchange or the NASDAQ.
- ETFs. An exchange traded fund is an investment fund made up of a basket of securities including shares and other assets. ETFs can be traded on stock exchanges and are often designed to track the performance of a specific index — for example, you might want to invest in an ETF that tracks the value of the S&P 500 index or the Dow Jones.
- Managed funds. A managed fund allows you to combine your money with other investors, with the balance then invested on your behalf by a fund manager. There are many managed funds that invest in US shares and stocks from around the world.
- CFDs. Some platforms also offer access to CFDs (contracts for difference) on US shares, which allow you to speculate on share price movements.
CFD trading accounts that trade US stocks
Which NZ trading platforms trade US shares?
There is a growing number of New Zealand share trading platforms that offer access to international stock exchanges. Some platforms offer international accounts that are separate to their New Zealand trading accounts, while others are fully integrated on the one platform.
Depending on your investment goals, you might want to look for a platform that specialises in providing access to US stock markets. These include:
- Stake. Stake provides access to over 3,700 US shares and ETFs. There are no brokerage fees but other charges apply. Learn more about Stake in our review
- Hatch. Hatch allows you to trade shares in over 2,900 US companies and invest in more than 500 US-listed ETFs, with brokerage fees of US$3 a trade. Our Hatch review has more information.
Other platforms allow US share trading in New Zealand and also provide access to global markets. These providers include:
- Sharesies. You can use Sharesies to invest in shares, ETFs and managed funds, providing access to over 3,000 companies and funds in New Zealand and the US.
- InvestNow. InvestNow provides access to 140 managed funds across New Zealand and global investments.
- Smartshares. Smartshares is an online investment platform that provides access to more than 30 ETFs, including 5 based on US shares.
- ASB Securities. You can use ASB Securities’ broker team to gain access to international markets, while NZ and Australian shares are also available.
Each platform works in a different way, but the same general rules apply as with buying New Zealand shares – with a few additional considerations. This means that you’ll be charged a brokerage fee and an exchange fee (for converting NZD to USD) when you trade shares.
Brokerage fees are sometimes higher on international accounts and there may be additional costs such as an inactivity fee.
How do I compare trading platforms?
Make sure that you take the following features and questions into consideration when comparing the benefits of USA share trading sites:
- How much is brokerage? Compare the fee each company charges every time you place a trade on US stocks. Be aware that this will be different to broker fees for NZX-listed stocks. Lower brokerage fees mean more affordable trading, but may be offset by other fees that apply to your account.
- What’s the exchange rate? Exchange rates and currency conversion fees vary from platform to platform and this will partly be used to offset low broker fees. Check what these are first.
- Will you need to pay a monthly fee? Most platforms don’t require you to pay a monthly fee, but this may occasionally be required in order to keep your account running or to access certain features.
- How is market data displayed? Check how up-to-date the market data offered by each platform is — being able to make trades based on current information is critical. Also compare the range and depth of data provided on different platforms.
- Can you only buy shares, or are a wider range of investments available? Check whether the platform only offers access to shares and ETFs, or whether you can also invest in managed funds.
- How easy is the platform to use? Is it fast, simple and convenient to execute a trade and monitor market performance? Check if you can open a free demo account to give the platform a try without risking any money.
- Is there a trading app? If you’d prefer to trade from your mobile, look for a platform with a dedicated (and user-friendly) trading app.
- What trading options are available? Is the platform just online or can you also place trades over the phone? Are flexible options like limit orders available to let you take advantage of market fluctuations?
- Are education and research resources available? Trading shares is complex, so does the platform offer the necessary tools to increase your investment knowledge?
- Is customer support available if you need it? How can it be accessed and when? Will you be able to get the help you need during US trading hours?
What are the pros and cons to investing in US shares?
Pros
- Access different investment opportunities. Trading via US stock exchanges allows you the freedom to take advantage of investment opportunities that are not available in New Zealand, including investing in some of the world’s largest companies.
- Increasingly more affordable. As a growing number of online share trading platforms compete for market share, brokerage fees for US markets are becoming more affordable.
- Diversify your portfolio. If all your investments depend on the performance of one national economy – i.e. New Zealand’s – is your portfolio really as diverse as you think? Buying international shares protects you against having all your eggs in one basket.
Cons
- Brokerage fees. You’ll need to contend with potentially higher brokerage fees whenever you place a trade on an international share market.
- Exchange rates. You’ll also need to pay to convert your NZD to USD to buy US shares, and then to convert back to NZD when you’re ready to cash out. Share trading platforms add a margin on top of the interbank exchange rate, so you’ll need to consider this additional cost before trading.
- Exchange rate fluctuations. The NZD/USD exchange rate fluctuates frequently, which might negatively impact your investment. You’ll need to take the rate into account when deciding on the best time to buy or sell shares.
- Additional fees. International trading accounts are sometimes subject to fees that New Zealand-only platforms are not, so check the fine print closely.
What are some of the risks?
Just like any other type of investing, buying and selling US stocks comes with a range of risks attached. The biggest issue to be aware of is the potential to lose some or all of your investment, but there are other specific risks when trading US shares.
One of the key risks to be aware of is that you may not have the same level of knowledge and expertise as you have when trading NZX shares. Investing in an area, industry or country which you know little about is always risky, so it pays to make sure you know what you’re getting yourself into.
Another factor worth considering is the tax implications of international trading. You don’t want to make any mistakes when declaring your income and find yourself on the wrong side of the IRD, so familiarise yourself with the tax treatment of your investments as soon as possible.
Finally, you’ll also need to consider the cost of trading. Brokerage fees, currency conversion fees and exchange rate fluctuations can all affect your ability to make a profit.
Bottom line
Investing in US shares from NZ allows you to invest in a much larger range of companies and ETFs than if you only invest on the NZX. It also allows you to buy shares in some of the world’s best-known companies and diversify your portfolio beyond New Zealand’s shores.
That said, make sure you’re aware of the risks involved before trading on US markets. You’ll also need to compare brokers and online trading platforms to find the right share trading provider for your needs.
Want to learn more about share trading?
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.
More guides on Finder
-
How does the ‘world’s first’ Bitcoin ETF work?
The Purpose Bitcoin ETF (BTCC) has started trading on Canada’s Toronto Stock Exchange. Here’s what you need to know.
-
How to invest in the BTCC Bitcoin ETF
The world’s first physical Bitcoin ETF has launched onto the stock market. Here’s how to invest if you’re in New Zealand.
-
How to invest in the Coinbase IPO
Everything we know about the Coinbase IP, plus how to buy in.
-
How to buy Napier Port shares (NPH)
Your simple and straightforward guide to investing in Napier Port shares on the NZX.
-
How to buy Tourism Holdings Limited shares (THL)
All the key details you need to know to buy THL shares on the NZX.
-
How to buy Port of Tauranga shares (POT)
The steps you need to take to buy Port of Tauranga shares on the NZX.
-
How to buy Arvida shares (ARV)
We’ll show you what you need to do to buy Arvida shares on the New Zealand Stock Exchange.
-
How to buy Freightways shares (FRE)
Your straightforward guide to buying Freightways shares on the NZX.
-
How to buy Templeton Emerging Markets shares (TEM)
Simple, step-by-step instructions if you want to invest in TEM.
-
How to buy Mainfreight shares (MFT)
Your simple how-to guide if you want to buy Mainfreight shares on the NZX.