For full functionality of this site it is necessary to enable JavaScript. Here are the instructions how to enable JavaScript in your web browser. Australians have never had more choice when it comes to investing in overseas securities. There are four options for investors who want to go it alone with an online broking account: Some of these offer the same product in currency-hedged and unhedged versions because getting the foreign exchange call right is half the challenge.

A broad test to apply is if you think the Australian dollar will fall, go unhedged. Unhedged products have been the strongest performers over the past year because of the "double whammy" effect: But as any foreign exchange forecaster will tell you, tread carefully.

Some of the world's smartest investors have self-destructed through bad currency calls. If you think you can do better, read on. A big part of that is growth in ETFs that track the big offshore indices such as the Dow Jones, but many ETFs are becoming more niche, targeting dividends, for example, or other listed asset classes. The SPDR Dow Jones Global Real Estate Fund ASX: DJRE has a one-year return of James MacNevin, chief operating officer, Asia Pacific for State Street Global Advisors, says the motivation to diversify offshore is "resonating with investors" and he thinks ETFs are a good fit.

You cannot achieve outperformance. Listed investment companies LICs have enjoyed a boom in and as fund managers open up their offerings through ASX-listed funds, and many of these are internationally focused.

With LICs, the fund manager tends to do the currency thinking for you and there is a stockpicker behind the portfolio, which is benchmarked against an index. You do not always get outperformance, but a good fund manager will beat the market in good times and fall less than the market in bad times. For firms who participate, it enables retail investors exposure to some of the best minds who might ordinarily restrict their funds to high net worth individuals.

Different markets mean different fees, settlement periods and tax regimes. In the United States, for example, foreign investors face a minefield of W-8BEN forms and chasing the Internal Revenue Service for refunds if they are taxed at the standard 30 per cent rate on US income. Some brokers have managed to simplify this, meaning Australian clients are eligible for the 15 per cent rate. Nathan Walsh, general manager for nabtrade, says: Investors will find it usually costs more to trade outside of the US market and need to watch the currency fees they are being charged when the FX side of a trade is handled by their online broker.

This can be a significant hidden cost in spite of its ease.

Cheapest ways to buy overseas shares - Telegraph

Fairfax Media Please upgrade your browser. Internet Explorer 7 is no longer supported. In order to view and use AFR properly and more securely you will need to upgrade to any of the following supported browsers for FREE: Enjoy unlimited access to Australia's best business news and market insights across desktop, tablet and mobile. My Saved Searches 0 Done Select all Delete. Home Markets Equity Markets. Nov 14 at ASX Announcements View all announcements. ETFs 'a good fit' James MacNevin, chief operating officer, Asia Pacific for State Street Global Advisors, says the motivation to diversify offshore is "resonating with investors" and he thinks ETFs are a good fit.

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