How to invest in the NYSE from Australia

Yvonne Taylor avatar
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Updated 19 Sep 2023
  • Find out how to expand your investment activities into the New York Stock Exchange.
  • Easiest ways to invest in the NYSE.
  • Pros and cons of investing in the NYSE.

The New York Stock Exchange is the largest in the world as measured by the market capitalisation of the securities listed there.

Investors resident in Australia can invest in NYSE-listed securities and, by extension, the US economy – also the world's largest.

Most investing apps and brokers have access to trade in this market. But, there are several options to consider since you can get exposure to the NYSE by investing in individual companies, funds, and index trackers. Read on for more details and find out where you can get started.

What can you invest in?

Ways to invest in the NYSE

It’s quite easy to invest in the NYSE from Australia, since many online brokers offer access to US exchanges (including the NASDAQ), the LSE, and the Euronext, while others deal exclusively in US stocks. You can invest in exchange traded funds (ETFs) and index funds or buy shares in individual companies.

Exchange traded funds

ETFs are investments that pool cash created by selling units in the fund, and investing the cash in a basket of securities – such as shares, fixed interest bonds and commodities. Each ETF aims to track a particular market index, industry, commodity or investment strategy.

ETF units can be bought and sold on the stock market similarly to company shares. The unit prices constantly change during the trading day but generally show less fluctuation than individual company share prices because they are not dependent on the performance of a single company. This is why ETFs are considered a way of spreading risk. Because they are less risky than individual shares, an investment in ETFs is less likely to record significant losses or gains in the short term. Investing in ETFs is a strategy for long-term investors.

Many ETFs passively track an index (see ‘Index funds’ below), but some are actively managed funds whose investments are chosen by a team of share market experts. Here are some examples of this type of fund:

  • JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI)
  • Dimensional US Core Equity 2 ETF (NYSEARCA: DFAC)
  • ARK Innovation ETF (NYSEARCA: ARKK)

Index funds

An index fund is a type of ETF that tracks the overall performance of a given market, e.g. the NYSE, by investing in shares of all the companies listed on the index, proportionate to their representation on the index. Among the top US indices are the Dow Jones Industrial Average (also known simply as ‘the Dow’), the S&P 500 index and the Russell 2000 index.

Because they automatically track an index, index fund ETFs are passive funds, unlike actively managed ETFs, which may not follow any index exactly. Passive funds will usually have lower management fees than actively managed ETFs.

Popular NYSE index funds include:

  • iShares Core S&P 500 ETF (NYSEARCA: IVV)
  • SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA: DIA)
  • iShares Russell 2000 ETF (NYSEARCA: IWM)

Individual company shares

Another way to invest in the NYSE is to select several of the companies listed on the exchange and invest in them directly.

It would be too time-consuming and expensive to attempt to invest in all of them, but the list includes many huge blue chip companies, such as Exxon Mobil (NYSE: XOM), Citigroup (NYSE: C), Pfizer (NYSE: PFE), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), and IBM (NYSE: IBM).

You can invest in all of these companies using a USD trading account with an online broker.

The fact that NYSE-listed companies are large and well-known does not protect you from the increased risk of investing in individual shares because the success of your investments depends on the fortunes of just a few companies rather than a diversified fund.

Unsure about what share dealer to use?

Where to invest in the NYSE

eToro

On website

eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Highlights

  • Trade and invest in top financial instruments, including a wide selection of stocks.
  • eToro is regulated by CySec, FCA, and ASIC.
  • Your funds are protected by industry-leading security protocols.
  • Earn up to 5.3% annual interest on your balance.*

*Applicable to uninvested funds. Your capital is at risk. Eligibility and Terms & Conditions apply.

Saxo Markets

On website

Saxo Markets

Highlights

  • Invest in 23,500+ stocks from ASX, New York, Hong Kong, and 50+ other global markets.
  • No platform fees, no inactivity fees, and no FX fees on each trade.
  • Analyse, improve and manage your risk using intuitive trading tools.
Pearler

On website

Highlights

  • Enjoy low, transparent fees.
  • An option to Autoinvest. Set-and-forget your investment strategy.
  • Simply invest into any ETF from one of Pearler's ETF managers for at least one year, and it's free.
  • Clearing House Electronic Sub-register System (CHESS) sponsored.
Superhero

On website

Highlights

  • Open an account with just $100 and start investing today with a $5 flat-free brokerage ($0 on US shares) on share trades.
  • Buy and sell US shares & ETFs with $0 brokerage plus trade unsettled funds.
  • Fund your account in minutes with PayID and enjoy realtime FX transfers for fast US share trading.
Tiger Brokers

On website

Highlights

  • Available for ASX, US & HK stocks trading, ETFs, and US options trading.
  • Free market data for ASX and US stocks.
  • More accessible investment to all with a demo account.
Webull

On website

Webull

Highlights

  • Trade AU & US stocks, ETFs, and Options with $0 commission for the first 30 days.
  • Provides intuitive and powerful advanced charts, multiple technical indicators, and premier Level 2 Advance (Nasdaq TotalView).
  • Regulated by ASIC.

Pros

  • Invest from as little as US$5.
  • No deposit or withdrawal fees.
  • Allows you to trade fractional shares.
  • Access to advanced trading tools.

Cons

  • Scarcity of instructional resources for investors.
  • Supports AU and US markets only.
Moomoo

Moomoo

Highlights

  • Trade blue-chip stocks in AU and US markets.
  • Trade multi-markets and multi-products with a lower commission. No custodian fee.
  • CHESS-Sponsored trading is now available.
  • Regulated by the Australian Securities and Investments Commission (ASIC).

Looking for the best online stock broker in Australia? Compare options with Finty.

First time investing?

How to invest in the NYSE

Step 1: Choose a broker

There are hundreds of online share trading platforms to choose from. When comparing options, check their brokerage, cash withdrawal, and activity fee amounts. Available tradable securities offered should include ETFs and shares.

An important thing to consider is the currency conversion fee. Since many brokers are now commission-free, they make money by adding a margin when converting your currency to USD. If you are investing a lot of money, this fee can be a determining factor when choosing where to trade.

Whichever broker you choose must have access to the NYSE. For the sake of having all your investment activity in one place, you may also want access to UK and European share markets from the same broker.

Some brokers offer commission-free trades on ETFs. If you’ve decided to invest in shares, look for a broker offering fractional shares since many NYSE companies have high prices for a single share (notably Berkshire Hathaway Inc Class A).

Step 2: Decide how much to invest

Only ever invest what you can afford to lose because share markets are volatile.

If you can’t withstand losses in the short term, it’s best to wait until you can or plan to invest for the long term only. Losses are always a possibility, and your capital will be at risk.

Step 3: Transfer funds to your account

Add funds to your trading account with a bank transfer, the most commonly accepted method. Most brokers also accept debit cards. A few brokers can accept credit card deposits too.

It may take some time for funds to clear before you can start trading, and if you are trading in USD but have transferred AUD, your cash will have to be converted into USD first. Note that your broker may require a minimum deposit amount.

Step 4: Choose between shares, ETFs and index funds (or a combination of them)

ETFs and index funds are diversified across a range of companies, so they typically experience lower price volatility than individual company shares and can be better for long-term investment.

  • Short-term investors hoping for quick capital gains (but also prepared for losses) may prefer to buy shares.
  • ETFs can often be traded commission-free.
  • Index funds mirror the market, so their value rises and falls in line with the broader market.

Step 5: Configure your order

Depending on the broker you use, you can choose from many different kinds of order.

A market price order is the most straightforward, requiring virtually no setup. Once executed, you’ll get shares at the next available market price for the share or fund unit.

You’ll need more options regarding order configuration if you have a specific strategy. Some brokers have highly customisable orders that can be triggered by events, meaning you can buy or sell when your chosen share or fund hits a price target.

Step 6: Place your order

When you’re happy with all of your decisions, submit your order to be executed.

Step 7: Monitor your investment

Share investment should not be a set-and-forget activity. Even if you intend to invest for the long term, you need to keep an eye on the company or fund's performance and price movements.

Still not sure?

Pros and cons

  • More investment opportunities. Branch out from investment solely in Australia to invest in securities on the world’s largest exchange.
  • Lots of choice. There are thousands of well-known companies to choose from and several thousand ETFs listed on the NYSE ARCA electronic exchange.
  • De-risk. Diversify your portfolio by choosing an ETF to reduce volatility.
  • NYSE trading hours. Trading hours (9:30 am to 4:00 pm Eastern Time, Monday to Friday) are 14 hours behind Sydney time, which can be inconvenient when placing price-sensitive orders.
  • Foreign currency risk. Having a broking account in AUD and trading shares or ETFs priced in USD exposes you to foreign currency risk and exchange conversion fees.
  • Foreign event volatility. US share and ETF prices are subject to volatility caused by events occurring in the US only, whose potential effects may not be immediately apparent to Australian investors.

As seen on

Media - The Sydney Morning Herald
Media - Yahoo Finance
Media - News.com.au
Media - Daily Mail Australia
Media - Australian Fintech
Media - Dynamic Business