Xinja Bank to launch US share trading platform for Australian investors
Australia’s 100% digital, built for mobile neobank, Xinja Bank, will launch a share trading platform that gives Australian investors easy access to more than 3000 US shares and exchange traded funds (ETFs) via the Xinja app.
Xinja’s Dabble, which will sit alongside the neobank’s bank account and savings account ‘Stash’, will provide quick and easy access to US shares, many with globally-recognized names including Tesla, Facebook, Google and Amazon.
Xinja has significantly cut the cost of investing, making it much more affordable for ordinary Australians.
For Dabble, a flat monthly subscription fee of $8 will be charged for unlimited trading (although pattern day trading is not permitted) on top of a competitive 1% FX fee per trade. There are no brokerage fees.
This is in sharp contrast to traditional services for trading in US stocks by Aussie banks, where brokerage can be as high as $19.50 per trade, with significant FX fees on top.
Dabble also offers ‘fractionalised trading’: investors will be able to buy whole shares, or a portion of a share depending on how much money they have and how much they want to invest.
Full units of US shares can be prohibitively expensive for some investors (often $US1000 or more). With Dabble, an investor can invest from as little as $1 in a company.
Xinja Bank founder and chief executive Eric Wilson said Dabble will give investors access to an alternative investment option in a period when interest rates, and an ability to earn a return on invested funds, remains very low.
Rates in Australia and around the globe are at record lows. Stock markets, including the US market, while riskier and more volatile than cash, have the potential to provide investors with greater returns over time.
“We are offering low cost, easy access via the Dabble platform, and the option to buy a portion of a share, which we hope opens up markets and investing to people who want to grow their wealth over the long term,” Mr Wilson said.
“Many US-listed companies’ shares trade at very high prices, which locks a lot of people out of the market. So while brand recognition for leading US companies is very high, few people invest directly. And entering the market hasn’t been easy. We want to lower the cost and make it simpler to bring those opportunities to Australians.”
State of the art technology sits behind Xinja’s new platform. Customers will be able to monitor their investments, and ETF and share prices in $A and $US in the app.
In Australia, via Dabble, orders will be automated, and executed when the US market is open. There is no ‘broker’ or human intervention in the trade: once an investor decides to buy a share, or a portion of a share, the order is placed and executed as soon as the US share market opens for business.
Xinja has also streamlined another key part of the process: ordinarily, funds transferred to buy or sell shares take several days to move between accounts. Via Dabble, the only delay will be the time difference between Australia and New York (funds only transfer during US market hours).
Mr Wilson said investing in share markets is a long-term strategy for wealth creation. “Shares are volatile,” he said. “The value of stock can go up and down, so you should never invest more than you can afford to lose.
“You should not be investing in shares for short-term gains. It is not for everyone because of the risks involved. But over the long-term, and particularly when interest rates are so low, shares can provide investors with access to growth markets and economies, and potentially better returns.”
An investor will only be able to invest as much money as is currently in their bank account, leveraged ETFs have been filtered out (as distinct from some retail trading offerings in the US) and investors who buy and sell a stock within a day, 4 days in a row (known as pattern day trading), will have their account blocked. Options are also not available. Tobacco and weapons-related stocks are also excluded.
