Jump to main navigation Jump to main content. Last updated Thursday, Sep. The stocks of companies based outside Canada are often touted as essential portfolio building blocks because they provide both diversification and access to stock sectors unavailable in this country.

According to some market pundits, stock returns abroad look more promising than at home, especially in higher-growth emerging markets. Most Canadians are familiar with buying and selling mutual funds that invest in foreign companies. Many have gravitated to exchange-traded funds for the same purpose. However, American companies represent less than half the foreign stock universe, as measured by market capitalization. Fortunately, investing in the stocks of companies based outside North America has never been easier for investors.

Care to invest in British pharmaceutical powerhouse GlaxoSmithKline PLC? What about tapping into the burgeoning Asian telecom market by owning a piece of China Mobile Ltd? Or how about gaining some exposure to the global consumer products market by buying some shares in Anheuser-Busch InBev SA, the Belgian brewing giant that owns iconic Canadian brand Labatt Blue?

Courtesy of financial products known as American Depositary Receipts ADRs , buying or selling shares in hundreds of non-North American companies can be as simple as trading Apple Inc. An ADR is a certificate that represents shares of a non-U. ADRs are issued by a U. They trade like stocks on one of the major American stock exchanges: There are also ADRs that trade in the U.

HowtoInvestOnline: High-Dividend Value-Priced European ADR Stocks

A foreign company hires a depositary bank to set up an ADR program for various reasons: There are many advantages to investing in foreign companies with ADRs that trade on a major U. Buy and sell procedures are the same as for U. This minimizes currency-management headaches. Securities and Exchange Commission listing requirements, so you get the same level of disclosure as any other listed U.

Generally Accepted Accounting Principles GAAP or International Financial Reporting Standards IFRS. For direct investors who are not content to limit their holdings in foreign companies to ADRs, two of the main Canadian discount brokers offer customers the facility to trade on stock exchanges beyond Canada and the U. HSBC InvestDirect is the long-established player in this space. Their clients can execute online trades for shares listed on the Hong Kong, London, Paris and Frankfurt stock exchanges and can access 30 other stock markets with a phone call.

Trades are settled in 11 currencies. Trades settle in seven currencies. TD Waterhouse charges flat-fee commissions for online trades. Additional market-specific fees may apply to transactions on foreign stock markets. For the enthusiastic direct investor, trading on foreign exchanges can be exciting.

Equities | TD Direct Investing

It also has its challenges, such as navigating the time difference between home and the foreign exchange, finding reliable company information in a language you understand, dealing with foreign rules on accounting and disclosure, managing investments in various currencies and getting reasonable exchange rates. There are definite benefits to including foreign stocks in your investment portfolio, but the question is how best to do it.

Trading directly on foreign exchanges beyond Canada and the United States entails more challenges than many investors wish to tackle. The investing route you choose will ultimately depend on how much time you care to spend managing your investments.

How to buy European company stocks in Canada ? : PersonalFinanceCanada

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