Robinhood Introduces Global Stocks

by | Aug 28, 2018 | NEWS

Robinhood has made a name for itself in the investment world by offering free trades on its easy to use app, but until recently, those trades were limited to companies traded on U.S. exchanges. Recently, however, the app has begun offering more and more options.

The company announced Tuesday that they are rolling out ADRs (American Depository Receipts) offering investors the opportunity to invest in over 250 global companies – still with no fees.

For now, the ADRs will be limited to companies trading in Canada, Japan, China, Germany, and the U.K., with French companies to follow in the coming months.

ADRs allow American investors to buy shares in U.S. dollars of stocks traded on foreign exchanges. ADRs are still subject to capital gains and still pay dividends, and the exchange rate is accounted for in the trade.

This expansion by Robinhood, especially on the heels of their opening up cryptocurrency and after-hours trading, should help to keep Robinhood competitive with other brokers. J.P Morgan is set to release their no-fee trading app later this week, and Fidelity recently began offering no-fee index funds.

As new, younger investors become the primary target for brokerage firms, demands for lower fees and better service are driving traditional brokers to change their tactics and opening the playing field ¬- giving new services like Robinhood a chance to enter the game.

The app has grown significantly since its release three years ago, and the creators have made no secret about their plans to take on full-service brokerage firms in the future. Robinhood will have to continue expanding their services if they hope to keep up with the big firms now that they too have started offering no-fee trades.