Zero commission investing in UK and EU stocks is now available on eToro - here's what you need to know
For many eToro users, access to US stocks commission free is just one of the many tantalising prospects the platform offers.
Now the platform has opened up zero commission investing for EU and UK stocks another game changer for Australian investors.
But before you get investing, here's what you need to know about the two markets.
With eToro opening up zero commission investing in UK and EU stocks, there's never been a better time to jump on the platform.
The move means users now have access to three of the world's major stock markets commission free, meaning Australians can now make fractional investments in companies that really make the world turn.
But what do users need to know before taking the plunge into these markets?
If the UK is where your mind is at, you'll likely be looking at investing in companies traditionally listed on the London Stock Exchange.
If you're more interested in EU-based companies, eToro has you covered too. Giants like Royal Dutch Shell, Airbus, and Nestle are all available to invest in on eToro.
If fashion is your passion, take a look into Louis Vuitton, Hermes or H&M, and as Europe is no stranger to the luxury automotive space, Volkswagen, Ferrari and BMW are all available to invest in with zero commission taken by eToro.
The app's simplicity means you can buy UK or EU shares on eToro in just a few clicks.
All you have to do is:
- Open an account (registration is free)
- Make your first deposit (a minimum of US$200)
- Pick a stock from eToro's massive library of options
- Click trade and you're done!
What you need to know about the EU and UK markets
According to eToro market analyst Josh Gilbert the EU and UK markets have performed well over the past 12 months, having recovered from the economic shock of the pandemic.
One of the best performers has been the French Index (CAC 40) which has gained around 32 per cent and comprises cyclical stocks like LVMH, Hermes and Renault.
Other markets such as the FTSE 100 and the Dax have returned 13 per cent and 25 per cent respectively, over the last year.
Business News Australia spoke with Josh Gilbert to find out who the biggest winners in the UK and EU have been out of COVID in the, what the markets' futures look like, and what users should keep in mind when looking to invest in companies on eToro.
Who are the biggest winners and losers out of COVID-19?
The big winners of covid were assets that could help employees work from home with ease and strong levels of digital engagement.
Overall, the European market has a much smaller weighting of tech shares than the US market. However, we have seen some European tech names perform well. ASML Holding NV is a Semiconductor manufacturer from the Netherlands. The semiconductor industry has been plagued with shortages over the last 18 months, so ASML has benefited from increased demand. Since the 13th March 2020, the stock has gained more than 160 per cent.
Another tech stock that has benefited from COVID is Adyen. The company is a payment provider that allows businesses to accept e-commerce payments and grow online revenue. As the world shifted towards eCommerce over the pandemic, Adyen's services became highly relevant for many businesses. Since the 13th March 2020, the stock has jumped 159 per cent.
More traditional stocks such as banks, energy and retailers were hit the hardest throughout COVID and early 2020 but are seeing their share prices recover now with the change in the economic environment.
Stocks such as Lloyds Bank, one of the largest financial institutions in the UK, saw their share price tumble more than 56 per cent from the 14th February to the 25th September 2020. However, in the last six months, the stock has risen around 41 per cent.
Taylor Whimpey, a UK housebuilder, has felt the full effect of the lengthy UK lockdown. With a worrying number of cases spreading throughout the UK in 2020, the country was forced into numerous lockdowns throughout the year, even shutting down construction sites in the process. With an uncertain economic environment, consumers were also very reluctant to purchase new homes. From the 21st of February to the 25th of September, Taylor Whimpey saw its share price fall by more than 56 per cent.
What does the future of the UK and EU markets look like?
The UK's vaccine rollout has been very successful, and all restrictions are expected to be lifted at the end of July. Assets that are more sensitive to the reopening will benefit from this, and the European markets are heavily weighted to consumer discretionary, financials and healthcare.
Other than the UK, the rest of Europe has struggled with its vaccine rollout, which may mean that Europe's economic recovery may lag against the rest of the world. However, most European companies' corporate earnings are impacted by global growth, which is, in general, improving.
What should users of eToro keep in mind when looking to invest in UK and EU stocks?
European and UK markets provide a way for investors to diversify their holdings.
Being focused on one economy or market offers just a one-dimensional approach. Different markets will grow at different rates and offer exposure to global stocks in various sectors.
The European market, such as the CAC, has excellent exposure to luxury retailers that are performing very well in this current environment.
Europe and the UK are likely to benefit from the increase in travel as restrictions are eased across European countries. Stocks such as easyJet, Ryanair and IAG are set to benefit as consumers begin to travel. The summer season is coming through in Europe, and many would have had enough of being locked down.
eToro is the world's leading social trading platform, which offers both investing in stocks and cryptocurrencies, as well as trading CFD with different underlying assets.