- ANZ is a dividend-paying stock listed on the Australian Stock Exchange.
- The bank experienced severe declines in revenue and profits during the pandemic but remained profitable.
- Learn how to buy shares in ANZ or via an ETF.
The Australia and New Zealand Banking Group Limited (ASX: ANZ), commonly known as ANZ, is an Australian multinational banking and financial services company. It is headquartered in Melbourne. ANZ was founded in London in 1835 and began operating in Sydney in that year as the Bank of Australasia.
Are you interested in buying ANZ shares? Here's how.
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ANZ operates in 32 markets globally, including in Australia, New Zealand, Asia, Pacific, the Middle East, Europe and America. It is one of the ‘Big Four’ banks in Australia and is the largest in New Zealand. ANZ is among the world's top 50 banks.
Subsidiaries of the bank include ANZ Bank New Zealand and ANZ Share Investing, among others.
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Step 1: Choose a broker
In order to buy shares online, you use a broker. You can choose from dozens of online brokers.
When selecting an online broker, here are some key features to consider.
In recent years, brokerage costs have plummeted, following the introduction of online share trading. There are many online platforms offering very competitive brokerage rates. It's a good idea to shop around.
You should consider brokerage costs in relation to the other services the online trader may or may not offer.
There are some online brokers who offer free trades if you sign up with them, often for a limited period or with a monthly cap, and this may be an important factor when you buy your ANZ shares.
Easy-to-use trading platform
Investing in shares doesn't have to be complicated, so look for a platform that's easy to use. Demo trading accounts and educational guides (preferably in video form) are other useful features for new investors.
Research and reporting
Find a platform with a solid research and reporting section that can provide valuable information about ANZ, such as company overview, price history, recommendations, and forecasts.
Step 2: Fund your trading account
Money needs to be added to most to your trading account before it can become fully active. Note that it could take several days for the funds to clear before you can begin trading.
Step 3: Decide how much you want to invest
Plan your investments based on what you can afford. Consider ANZ's current share price and make a judgment, and remember you can always buy more when it drops.
Step 4: Shares or an ETF?
You'll need to decide whether to invest in shares or ETFs. ETFs (Exchange Traded Funds) are considered a less risky option since they invest in a group of companies or market indices rather than rely on the performance of a single share. This means less volatility, and you win if the market wins, but this option is less interesting for those looking to actively manage their investments.
For exposure to ANZ in an ETF, options include iShares MSCI Australia ETF (EWA), Franklin FTSE Australia ETF (FLAU), and JPMorgan BetaBuilders Developed Asia ex-Japan ETF (BBAX).
Step 5: Decide your order type
You place orders with online brokers to tell them what kind of trades you want to make and how you want your money to behave.
An order to buy shares at the current market price is called a market order. These prices may change as you make the trade in fast-moving markets. Let’s say you place an order for ANZ's shares at $30, but by the time it executes the share price has dropped to $28. You will get your shares at a lower price. The same situation applies if the share price goes up while your order is being executed.
With a buy limit order, your trade will only execute when the share price reaches the price, or lower, that you nominate. Let’s say you decide you only want to buy ANZ shares at $29.50 or lower. Once the price drops to $29.50, your limit order will kick in.
This is when you nominate a price range within which to buy or sell your shares. When that price range is reached, your order is executed, but only to the extent that it can be completed within your price range. For example, you decide you want to sell your ANZ shares if they fall to $30, but not if the price drops below $28. If the price falls to $30, your stop limit order executes, but not all of your shares may be sold if the price continues to drop and falls below $28.
You nominate a price at which you decide to sell your shares. If the share price drops significantly, for example, the stop loss means you automatically sell out before your shareholding suffers too much damage.
You might decide to set a stop loss at $25. If your ANZ shares hit this price, the order executes and they are sold.
Step 6: Place your order
Once you have a strategy and funds in place, it's time to invest. On most platforms, placing an order is as simple as configuring a few options and clicking a button.
Step 7: Monitor your investment
No matter whether you invest to gain from speculation on share price fluctuations or as a long-term investment, you should keep an eye on the company and its share price movements.
Track ANZ’s performance
You have to keep track of business fundamentals, company performance and share price movements. ANZ is a dividend-paying stock. Therefore, you also need to watch dividend levels. ANZ reduced its dividend payments in 2020 as a result of the drastic pandemic-induced decline in revenues and profits.
Keep an eye on how it performs post-pandemic. The trend seems positive.
Watch for developments in the banking and financial services sector
The Australian banking and financial services sector is highly competitive. Traditional banks like ANZ are not just competing with each other, both online and offline, but also with financial technology (fintech) startups in Australia and elsewhere.
ANZ is competing with the other top banks in Australia including Commonwealth Bank of Australia (ASX: CBA), Westpac (ASX: WBC), National Australian Bank (ASX: NAB), Bank of Queensland (ASX: BOQ) and Macquarie Bank (ASX: MQG), among others.
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