How to invest in Greater Asia: Investing in these markets as US citizens is different from investing in American markets. In the Greater Asian markets there are restrictions on foreign investment, currency conversion and fluctuation problems and most brokers cannot trade stocks on Greater Asian exchanges. The only exceptions are the following:
The four types of Investment: There are currently four types of investments vehicles that we recommend. These investment vehicles are Exchange Traded Funds, stocks listed as American Depositary Receipts, Mutual Funds and direct investments in Greater Asian stocks exchanges. These are discussed in more detail below. Also read our section on International Investing and Investing in ADRs.
American Depositary Receipts, or ADRs: To gain access to capital from US investors many of the larger, and higher quality Greater Asian corporations are listed and traded on US stock exchanges as ADRs (American Depositary Receipts). The Bank of New York lists all the available Greater Asian ADRs including ADRs in Latin America, Africa and Europe. You can buy and sell these ADRs just like US stocks.
Exchange Traded Funds, or ETFs: An ETF is a fund that tracks an index, but can be traded like a stock. You can do just about anything with an ETF that they can do with a normal stock, such as short selling. Their prices fluctuate from moment to moment just like any stock. Since an ETF simply maintains a portfolio that mirrors the index, little management is required and management and transaction costs are minimal. One key advantage over ADRs is that with an ETF you diversify risk across all the stocks in the index. These funds reflect broad stock indexes for various markets.
Mutual Funds. Managers of mutual funds select a range of stocks to include in the fund, choosing stocks to suit their stated objectives. This management comes at a cost, especially for Greater Asian funds. These funds simplify life greatly though. You can choose them by country, by region, by industry, or by other concepts. Often there are restrictions such as, minimum investment, frequency of trading, penalty for early withdrawal. Usually you are only able to buy and sell on a daily basis. ETFs have many advantages over Mutual Funds, though there are few ETFs in Asia.
Greater Asian Stock Exchanges:
U.S. residents, expatriates and foreign nationals have the ability to buy and sell securities directly through an authorized dealer/broker in Foreign Exchanges. The dealer/brokers in Greater Asia function much like US Stock Brokers such as Fidelity Investments but deal only in local currencies such as the Russian Ruble or the Hong Kong Dollar. To trade in these markets, traders must open local accounts at the broker/dealer and Charter local or International Bank. Our Broker/Dealers can provide direct access to the following markets using Web Based Trading Systems that are similar to E-Trade and Fidelity.
- Hong Kong
- Singapore
- Australia
- Japan
- Korea
- Taiwan
- Shenzhen B
(China)
- Shanghai B (China)
- Philippines
- Thailand
- Indonesia
- Russia
- India
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