NEW YORK, Sept 12 (Reuters) - Charles Schwab Corp, one of the biggest U.S. brokerages, announced on Wednesday a new online platform giving individual investors direct access to 12 non-U.S. markets with the ability to trade in their local currencies.
Schwab said it would offer U.S.-based investors commission-free trading on the platform until the end of March, though currency conversion and other fees will still apply.
Trading foreign stocks in their local currencies can offer investors diversification, a hedge against the U.S. dollar, and greater access to opportunities outside of the United States, said Brian McDonald, senior vice president of Schwab’s active investor services.
But there are several risks the average investor should consider, including differences in financial reporting standards and exposure to both market and currency risks, said Greg McBride, senior financial analyst at Bankrate.com in North Palm Beach, Florida.
“Most individual investors are just not cut out to be stock pickers, particularly on foreign exchanges,” McBride said. “But the necessity for international allocation means that low-cost ETFs (exchange-traded funds) and index mutual funds are the more suitable option for most individual investors.”
San Francisco-based Schwab said its Schwab Global Account is open to all U.S.-based investors and gives access to markets in Australia, Belgium, Canada, Finland, France, Germany, Hong Kong, Italy, Japan, Netherlands, Norway, and the United Kingdom.