Interactive Investor

Fee-free trading offer on US shares

31st January 2022 11:01

Jemma Jackson from interactive investor

interactive investor marks US earnings season with a special offer.

  • Offer runs from 31 January to 11 February.
  • The US is the most popular market for customers trading internationally, and counted for 20% of direct equity trades last year - second only to the UK at 78%. 
  • Market volatility has been focussing investor minds – 24 January 2022 was ii’s 3rd busiest trading day in its history by volume, with Tesla, Microsoft, and Apple the top three most traded US stocks.

interactive investor, the UK’s second-largest direct-to-consumer investment platform, has launched a special fee-free trading offer on US stocks, to coincide with the busiest two weeks of US corporate earnings season – where publicly-traded US companies report their quarterly earnings.

The offer runs from 2.30pm Monday 31st January until 9pm on Friday 11th February, and covers both buys and sells.

This initiative comes after a volatile start to the year, with has clearly focussed investor minds. Monday 24 January 2022 marked ii’s third busiest ever trading day by volume of trades, which was also ii’s second busiest ever trading day by value.

This deal offers substantial savings for investors. The usual cost for US trades is £7.99 on ii’s core Investor plan.

Key features of the new overseas offer:

Broadening your investment horizons

Lee Wild, Head of Equity Strategy at interactive investor, explains: “When you begin your investing journey, there are obvious advantages to sticking with what you know. That typically means stocks or funds focused on your home market. But it’s a big world out there full of opportunities that are now so simple to access and research.

“Diversification is universally accepted as a key investment strategy for most portfolios. Not broadening your investment horizons risks missing out on hot sectors or global megatrends, like we saw with the US tech boom. It’s just not possible to get exposure to big technology stocks by investing in the UK alone.

“It’s the same with other sectors like the motor industry – good luck finding dynamic electric vehicle manufacturers on the UK stock exchange. There are far more benefits to investing overseas. In fact, the greater risk is not looking further afield where plenty of potentially lucrative opportunities exist. Every investor should have at least some exposure to international markets. If you’re happy jetting off abroad for your summer holiday, investing overseas should hold no fear. Just be prepared to stay for a lifetime, not two weeks.”

Direct market access

Customers trading internationally on ii get direct market access on primary exchanges, with the important benefit of live local market prices rather than a watered-down UK version, which is dependent on a UK market being open at the same time as the market in question.

A busy two weeks ahead for US earnings

The two-week offer from ii covers a flurry of earnings announcements from large, publicly traded companies in the US.

Victoria Scholar, Head of Investment, interactive investor, explains: “Coming off the back of one of the best years for stock markets in history, there has been a major change of tune for markets at the beginning of 2022.

“January has seen the worst start to the year for equities since the height of the global financial crisis in 2008. A cocktail of headwinds around inflationary pressures, central bank tightening, and geopolitical tensions suggest we are in for a bumpy ride ahead, as the luxury of the last 22-month upswing fades into the rear-view mirror.

“The drip feed of US corporate scorecards should provide some insight into the overall strength of corporate America as well as some clues as to how well companies are navigating rising cost pressures, tightening monetary policy, and uncertainty around the global supply chain.”

Lee Wild, Head of Equity Strategy, interactive investor, adds: “This earnings season was always going to be tough for US companies. Fuelled by ultra-low interest rates, colossal government support, and a post-pandemic spending boom - profits have been restored, and that’s been reflected in stock prices.

“When markets become inflated like this, investors like an opportunity to take profits, and speculation around the Federal Reserve’s rate tightening cycle was the perfect excuse. But after darkness comes the light, and sharp declines present opportunities. The chance of success increases significantly if you look for sensibly valued companies with solid fundamentals like revenue, profits and dividends.”

Examples of key earning announcements from 31st January to 11th February:

A chance to get creative

Victoria Scholar, Head of Investment at interactive investor, adds: “US markets have enjoyed an impressive outperformance in recent years underpinned by rock-bottom interest rates as other geographies such as the UK and China have lagged. As we see a significant rotation taking place, away from tech towards more traditional sectors, the geographical mix of top performers is likely to change as well.

“Investors are now having to get more creative, as stock picking becomes more important than ever to separate the winners from the losers. While the heightened volatility can feel unsettling, it also creates significant investment opportunities to pick up previously expensive stocks at now discounted valuations, or to sell stocks that no longer deserve pride of place in a portfolio.”

Most traded US stocks 1-28 January 2022

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