JustbeforeIstart,IalsowantedtoletyouknowaboutsomeplanstoexpandMoneyWeekAsiabeyondtheweeklyarticle。

First,therestheMoneyWeekblog,whereIllbepostingregularstoriesandcommentonthelatesteventsinAsia。

Second,forthoseofyouwhoaskedformoreindividualstockrecommendations,werethinkingoflaunchinganewservicewhichwillfocusonhigh-qualityAsiancompaniesofallsizes,mostlylistedinHongKong,Singapore,LondonandNewYork。

TheaimwillbetoconstructasmallbutfocusedportfolioofstocksthatwillgrowwithAsiaoverthelongterm。

Werestillworkingoutthedetails,butIhopetobeabletotellyoumoreoverthenextfewweeks。

Anyway,letsgetbacktothehowtoguide…

Howtobuyforeignshares

First,letslookathowinvestorscanbuyforeignsharesandfunds。

Therearethreemainwaystodothis。

1。

Openanaccountwithabrokerinyourcountrywhichtradesinthemarketyouwantthroughalocalofficeorapartner。

PopularchoicesintheUKincludeTDWaterhouseandInteractiveBrokers。

Thesediscountbrokershavesignificantlyboughtdownthecostoftradingmajormarkets;forexample,TDWaterhouseoffersHongKong,SingaporeandAustraliansharesonlinefor£12orlesspertrade。

Otherfull-servicebrokerssuchasKillikandBarclaysofferawiderrangeofmarketsathighercost。

2。

Useabrokerthatwillbuytheshareforyouthroughamarketmakerafirmthatmakesamarketoff-exchangeinforeignstocks。

Thiscangiveyouaccesstoanumberofmarketsandstocksthatdirectbrokersdontofferbecausethevolumedoesntjustifythemhavingalocalpresencethere。

BritishinvestorscouldtryRedmayneBentley,whichsaysitwilltrytogetmoststocksinmostAsianmarkets。

Onthedownside,admincostswillbehighforsomemarkets(maybe£100atradeorso)andyoumaypayhigherprices。

3。

Openanaccountwithaforeignbroker。

Thisisoftenthecheapestoption,butyoushouldrememberthatbydoingso,yougooutsidetheUKinvestorprotectionschemes;anycompensationyoureceiveifabrokerrunsoffwithyourmoneywilldependonthelocalrules。

IfyouwantaccesstoalargerangeofAsianmarkets,youcouldtakealookatHongKongonlinebrokerBoom。

Iveputtogetheratableofsomeprovidershere。

Whatyoullnoticeisthattheresnosinglelow-costbrokerthatwillletyoutradeallthemajormarketsaroundtheworldononeplatform。

Inmyview,TDWaterhouseistheclosestasagoodstarterpackage,butsomeofyoumaybefrustratedtoseethatitdoesnotofferJapan。

MostAsianmarketsareopentoforeigninvestors,butthereareafewexceptions。

Specifically,Indianmarketsareclosedtonon-Indians,thereareseveraldifferenttypesofChinesesharesandThailandhasanoddsystemofforeignandlocalshares。

Fordetails,seethelongerversionoftheguide。

Fivethingstoremember

Youcouldfillabookwithadviceaboutbuyingforeignshares,butherearefivekeythingsthatinvestorsoftendontrealise:

1。

Whenbuyingforeignshares,rememberthatrulesinmanymarketsmaybeweakerthanyoureusedto。

Corporategovernanceabusesmaybemorecommon,watchdogslessvigilant,accountingstandardsshakierandcorruptionandfraudamuchhigherrisk。

2。

Dontoverlookcompanieslistedoutsidetheirhomecountry。

ManyfirmschoosetolistinHongKong,London,NewYorkorSingaporebecausethemarketstherearebigger。

Investinginthesemaysometimesbemorecost-effectivethanpayinghigherfeestobuystockslistedintheirhomecountry。

3。

ManycompaniesalsohaveasecondarylistinginLondonorNewYorkthroughAmericanDepositaryReceipts(ADRs)orGlobalDepositaryReceipts(GDRs)。

BNYMellonhasadirectoryofADRshere,althoughnotalloftheseareavailabletoretailinvestors;manyareeitherunlistedoronlytradeinbigblocksbetweeninstitutions。

(ForafullerdesciptionofADRs,seethelongerversion。

)

4。

Foreignshares,exchange-tradedfunds(ETFs)andinvestmenttrusts/closed-endfundscanbeheldwithinanIndividualSavingsAccount(Isa)wrapperaslongastheytradeonarecognisedexchangeandyourbrokerpermitsit(mostfirmsthatofferforeignsharesdo,butnotall)。

Youcanfindthelistofrecognisedexchangeshere。

Itincludesmostmajormarkets,buttherearesomeexceptions,includingAim。

5。

Minimumdealsizesforsomesharesinsomemarketsmaybelargerthanyouexpect,duetolocaloddlotrules。

Anoddlotisaquantityofsharesthatdiffersfromastandard-sizedtradingunit。

IntheUK,tradingoddlotsisnotdifficult,butinsomemarkets,youmayhavetopayahighpremiumoritmaynotevenbepossible。

Investinginfunds

Inthesurvey,manyofyouaskedifIcanprovidemorefundideasintheemails。

Therearethreemaincategoriesoffunds:ETFs,investmenttrusts/closed-endfundsandunittrusts/open-endedinvestmentcompanies。

Ifyoureunsurewhatthedifferencesare,pleaseseetheextendedguide,whereIvegoneintomoredetail。

ForETFs,thesamerulesonavailabilityandcostsapplyaswithshares。

SoIndia-listedoneswontbeavailabletomostofyouandKorea-listedoneswillbeexpensivethroughaUKbroker,forexample。

IveputtogetheralistofalltheAsia-relatedETFsthatIknowof,whichyoucandownloadasaspreadsheethere。

Thesituationissimilarwithinvestmenttrusts/closed-endfunds。

Ifyoucanbuysharesonaforeignmarket,youshouldbeabletogetinvestmenttrustslistedthereaswell。

SoonIhopetoproduceaguideofalltheclosed-endfundsandinvestmenttrusts。

Inthemeantime,youcantrysearchingsitessuchasTrustnetintheUKortheClosed-EndFundsAssociationintheUS。

Howtobuyunittrusts

Unittrusts/open-endedinvestmentcompaniesarealittlemorecomplicated。

Notallfundsareavailableforinvestorsinallcountries–itdependsonwhethertheyreregisteredforsalethere。

Majorfundsfrommajorprovidersareusuallyregisteredacrossseveralcountries,butthereareoftensomeoddomissions。

Othersmaybeavailableasoffshorefunds,butthesewillusuallybehardertogetholdof。

Itsvirtuallyimpossiblefornon-USinvestorstogetholdofUS-onlymutualfunds。

Youshouldconsiderbuyingthroughadiscountbrokertoavoidtheentryandexitfeesandperhapsgetadiscountonthemanagementfee;thetwobigUKfundsupermarketsareHargreavesLansdownandFidelityFundsNetwork(whichdespitebeingownedbyFidelityoffersmanyfundsfromotherproviders)。

However,manydiscountbrokersdontofferfundsfromcertainprovidersorwontletthembeheldinanIsa。

Ifyourestrugglingtofindaspecificfund,youcouldtryabrokersuchasBrewinDolphin,whichhasagoodreputationfortherangeoffundsitcangetalthoughasafull-servicebrokeritwillbemoreexpensivethanasupermarket。

Youcanalsobuyfundsthroughafinancialadvisorordirectfromthemanagementcompany。

However,buyingdirectlyisusuallynocheaperandsometimesmoreexpensive。

CompilingafulllistofAsia-relatedfundswouldbeahugejobsincetherearesomanyofthem,butIlltrytoproducealistofthemostusefulonesinthefuture。

Ifyourelookingforaspecifictypeoffund,youcansearchonTrustnetandMorningstar,butbeawarethatjustbecausesomethingislisteddoesntmeanitseasytoget。

(ThatlinkistotheUKhomepagebytheway–ifyourenotbasedintheUK,makesureyouswitchtoyourhomecountry。

)

HowtobuyAsianbonds

InvestorsinAsianbondsarenotaswellservedasinvestorsinequities。

Whiletherearenorulestopreventyoufrombuyingbondsdirectlyinmostmarkets,inpracticetheminimum-sizeddealthatbrokersarewillingtodoputsthisoptionoutofreachformostofus。

ThereareanumberofemergingmarketbondETFs,unittrustsandinvestmenttrusts,butthesegenerallygiveyouaverylimitedexposuretoAsianbonds。

SoifyouwantanAsian-debtpure-playfund,yourchoicesarelimited。

ThereareahandfulofETFsthataroseoutoftheAsianBondFundinitiative,whichwasaregionalgovernmentattempttobroadenthelocalbondmarketsintheaftermathoftheAsiancrisis。

Theseholdlocalcurrencygovernmentdebt。

AberdeenoffersaUS-listedclosed-endfundcalledtheAsia-PacificIncomeFund,whiletherearealsoafewAsianbondunittrusts/Oeics。

Becausethesearesomethingofanicheproduct,noneseemtobelistedbythefundsupermarkets,soyouwillprobablyhavetobuythemviaafull-servicebrokerordirectfromthemanagementcompany(buyingdirectisnocheaperthanbuyingviaabroker)。

Ihaventinvestedinanyoftheseunittrusts,soIcantvouchforhowsimplebuyingthemwouldbe。