Dipping my toes across the pond: why I’m diversifying my investment portfolio geographically

Halifax have decided to completely remove international dealing commission from trades on their share-dealing services.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Closeup ruffled American flag representing US stocks and shares

Image source: Getty Images

A little over a month ago, I wrote about how my broker – Halifax – had temporarily removed the commission fees on international trades:

Halifax have extended their offer into September, after removing online share-dealing commission fees in August. Normally these cost £9.50 per trade, but until the end of this month they’re not applicable when buying or selling international stocks! Though it’s worth noting that FX (foreign exchange) charges do still apply, at 1.25%.

So imagine my delight when I logged in recently, only to discover that Halifax was making this ‘trial’ permanent!

No online dealing commission on international stocks

Because our international dealing commission offer in August and September was such a success, we’ve decided to remove international dealing commission completely. FX charges still apply (1.25%).

Realistically, this helps in my goal to diversify the holdings in my Stocks And Shares ISA since I had felt that I was too heavily weighted towards UK-listed companies.

Don’t get me wrong, my own personal view is that a huge number of British publicly listed companies are looking great value at current prices, even if the FTSE 100 is hitting new year-to-date highs as I write (around 7,220)! But to use the index as just one indicator of value, the Footsie still isn’t at the level it was pre-pandemic (on 19th January 2020 it closed at 7,674)…

So while I’ll still use the advice from Share Advisor‘s analysts to help identify which stocks from UK markets might make for good additions to my investing portfolio, I’ll also pay close attention to the US recommendations to make sure that the vast majority of my investments aren’t only based in one region.

Why? Well, simply put, we just don’t know what lies around the corner in life! And while many events impact markets all around the world simultaneously, others can have a heavier impact on just one or a select few countries. So diversifying my portfolio geographically (as well as ensuring I’m invested in a variety of different sectors) feels like a good strategy to prepare for any future event, no matter what that might be (I think my crystal ball got lost in my last house move…)

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does is constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based UK investors.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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