International share trading has become increasingly accessible for Australian investors seeking to diversify their portfolios beyond the ASX. With the right international share trading platform, investors can access global markets, buy US shares from Australia, and participate in the growth of international companies across multiple continents.
Why Invest in International Shares?
Investing in international shares offers Australian investors numerous advantages that can significantly enhance their investment portfolio’s performance and resilience.
Portfolio Diversification Benefits
International investing provides crucial diversification that reduces overall portfolio risk. By spreading investments across different countries and economies, investors can minimize the impact of local market downturns on their total returns. This geographic diversification helps protect against country-specific risks such as political instability, economic recession, or currency devaluation.
Access to Global Growth Opportunities
International markets offer exposure to companies and sectors that may not be well-represented on the Australian Stock Exchange. Investors can access:
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
- Technology giants from the United States
- Emerging market growth stories from Asia and Latin America
- European luxury brands and industrial companies
- Innovative companies in sectors like renewable energy and biotechnology
Currency Diversification
Holding international shares provides natural currency hedging against Australian dollar fluctuations. When the AUD weakens against other major currencies, international holdings can increase in value when converted back to Australian dollars, providing a buffer against domestic currency volatility.
Sector Exposure Opportunities
The Australian market is heavily weighted toward financial services, mining, and resources. International investing allows access to sectors that are underrepresented locally, including:
- Advanced technology and software companies
- Consumer discretionary brands
- Healthcare and pharmaceutical innovators
- Renewable energy and clean technology firms
The Best International Share Trading Platforms
According to our analysis of fees, available markets and trading tools, several platforms stand out for Australian investors seeking international exposure.
Interactive Brokers
Interactive Brokers emerged as the top choice for international stock trades due to its comprehensive global market access and competitive fee structure.
Key Features
- Access to over 135 markets across 33 countries
- Low global brokerage fees starting from USD $1
- Minimal currency conversion fees
- Advanced trading tools and research capabilities
- Professional-grade platform suitable for active traders
Ideal For: Experienced investors seeking maximum market access and professional trading tools.
eToro
eToro is one of the world’s leading brokers and pioneer of social trading. They offer a huge range of markets, including Australian and international shares, available to trade with $0 commission.
Key Features
- $0 commission on a huge range of Australian and international shares
- User friendly trading platform
- A wealth of educational resources
- Copy the trades of top investors
- Very well regulated
IC Markets
International Capital (IC) Markets is one of Australia’s preeminent brokers. IC Markets offers trading on a wide range of assets via Contracts For Differences (CFDs) including Australian and international stocks, commodities and ETFs.
Key Features
- An experienced, industry-leading broker
- Highly rated on Trustpilot in several categories
- Access to a wide range of international stocks via CFDs
- A choice of trading platforms including MT4, MT5 and cTrader
- Mobile trading via the IC Markets app
CMC Invest
CMC Invest stands out for its competitive pricing structure and user-friendly interface designed for Australian investors. Key Features:
- Zero brokerage fees for some global stock trades
- Access to major international markets including US, UK, and European exchanges
- Comprehensive research and analysis tools
- Mobile and desktop trading platforms
- Educational resources for beginner investors
Ideal For: Cost-conscious investors seeking zero-fee international trading options.
The Pros and Cons of International Shares
Understanding both the advantages and potential drawbacks of international investing helps investors make informed decisions about global market exposure.
Advantages of International Investing
Enhanced Diversification: International shares provide geographic and sector diversification that reduces portfolio concentration risk. This diversification can lead to more stable long-term returns and reduced volatility during domestic market downturns.
Access to Global Leaders: Many of the world’s largest and most innovative companies trade on international exchanges. Australian investors can access industry leaders in technology, healthcare, consumer goods, and emerging sectors that may not be available domestically.
Growth Opportunities: Emerging markets and developing economies often offer higher growth potential than mature markets. International investing provides access to these growth stories and demographic trends.
Currency Benefits: International holdings can provide natural hedging against Australian dollar weakness, potentially enhancing returns when foreign currencies strengthen relative to the AUD.
Time Zone Advantages: International markets operate in different time zones, allowing investors to react to global news and events outside Australian trading hours.
Potential Disadvantages and Risks
Currency Risk: While currency exposure can be beneficial, it also introduces additional volatility. Unfavorable exchange rate movements can erode returns even when the underlying investments perform well.
Higher Costs: International trading typically involves higher fees than domestic trading, including:
- Currency conversion costs
- Higher brokerage fees
- Potential withholding taxes
- Research and data costs
Regulatory Complexity: Different countries have varying regulatory frameworks, tax implications, and reporting requirements that can complicate international investing for individual investors.
Market Knowledge Requirements: Successfully investing in international markets requires understanding of local economic conditions, political environments, and market dynamics that may be unfamiliar to Australian investors.
Time Zone Challenges: Managing international investments can be challenging due to different trading hours and the need to monitor global markets outside normal Australian business hours.
Settlement and Custody Risks: International trades may involve longer settlement periods and different custody arrangements, potentially increasing operational risks.
