Jon Chevreau broke the news that TD Waterhouse has announced that clients can sign up for a Global Trading account that will allow online access to 10 international markets and ability to hold up to 7 currencies. Clients can trade on stock exchanges in London, Sydney, Brussels, Paris, Frankfurt, Hong Kong, Milan, Amsterdam, Singapore and Madrid and hold cash balances and settle trades in Pound, Euro, Australian Dollar, Hong Kong Dollar, Singapore Dollar in addition to Canadian and U.S. dollars.
The ability to access these foreign stock exchanges comes at a steep price. Trading on the London stock exchange costs £29 ($45.82 at current exchange rates) and €29 ($38.28) on the European exchanges. If you think that’s steep, each trade on the Sydney exchange will cost you A$99 ($95.03). Add in higher fees for converting Canadian Dollars into Pounds, Euros and Aussie Dollars, stamp duties, levies and taxes and you are looking at forking out a substantial outlay in fees and taxes.
An investor can access every one of these markets through ETFs trading on the US exchanges with trades starting at $9.99. For instance, the iShares MSCI Australia Index (EWA) provides broad market access to Australian Equities. They can also access many of the stocks trading in foreign markets through American Depository Receipts. They can even save a bundle on converting Canadian dollars into US dollars (or back) with Norbert’s Gambit. The question is why would retail Canadian investors even bother with Global Trading? What do international markets offer that Canadian investors cannot already obtain for a much lower price?
