You can now buy fractional shares in many stocks and ETFs on BUX Zero. Fractional investing means you don’t have to buy a full stock or ETF, you can just purchase a fraction, making it even more affordable to invest with small amounts.
- Available on selected US stocks and 20 major ETFs
- Start with as little as €10.
Fractional shares solve a big problem
We started BUX Zero with a mission to make investing accessible and affordable to everyone. We cut the fees down to zero and made it simple to buy stocks and ETFs.
But there’s still a problem: the shares themselves can be expensive. For example, one share of Amazon costs $3,389, Google is $2,866, and Tesla is $1,096.*
Most new investors don’t have thousands of dollars to buy these popular shares. And building a diverse portfolio of 10-20 stocks and ETFs would be almost impossible with a small budget.
With fractional shares, that all changes. Now you can buy a slice of Amazon stock for just €10. Best of all, it allows you to build a diverse portfolio of stocks and ETFs by investing small amounts in lots of different assets.
How does it work?
When you purchase a stock or ETF on the BUX Zero app, you’ll now get the option to place your order using a cash amount.
You can enter as little as €10 and we’ll buy as many fractions as we can for that amount. Let’s say a company’s stock is listed at €1,000 and you want to buy €200 worth. You’d then own 0.2 (20%) of a share.
Alternatively, you can enter a specific number of fractional shares you’d like to buy, such as 0.1 share or 0.25 shares.
Which stocks and ETFs are available for fractional shares?
At the moment, we’re launching with a number of big US stocks so you can try it out with tech names like Google and Amazon. We’ll later roll it out to more US stocks and European stocks.
As for ETFs, we’re starting with 20 products including the S&P 500 Index ETF (Vanguard). This ETF gives you exposure to 500 of the biggest US companies and is consistently one of the most popular investments on BUX Zero. You can also purchase the Automation & Robotics ETF (iShares), which is a basket of cutting-edge technology companies. Or the Europe Dividend ETF if dividends are a big part of your investment strategy.
Fractional shares are currently only available with market orders (which means buying the shares immediately at the best available market price). Fractional investing will soon be part of our Savings Plans, too.
Like all US stocks, there is no commission when purchasing fractional shares with BUX Zero, only a small FX markup. Please see our pricing page for details.
What about dividends, voting rights, and stock splits?
Fractional shares are still eligible for dividends, but they’ll be proportional to the amount you own. For example, if you hold 0.5 shares of Apple, you’ll receive 50% of the dividend. Note: this won’t apply if the amount is too small (we can’t pay a fraction of a cent, for example).
The same logic applies for stock splits. If you hold 0.5 shares in Apple and the stock goes through a 2:1 split, you’ll then own 1 full share.
Users still have voting rights where applicable and BUX will aggregate the votes. We will round down to the nearest whole share when reporting.
Please note: your fractional shares are not transferable to another broker. If you close your account, your fractional shares will need to be sold.
As always, we’ve made the process as simple as possible for you, but here’s what’s happening behind the scenes.
Let’s say you purchase 0.7 shares of Apple with BUX Zero. We might buy 1 full share on the market and credit your account with 0.7 shares. We’ll keep the remaining 0.3 on the fractional book. If someone else later orders 0.3 shares, we can sell them straight from the fractional book.
Now let’s say you want to sell 1.5 Apple shares. We might sell 1 full share straight into the market, and buy the other 0.5 from you to keep on the fractional book.
These are simplified examples and the trade could play out in many different ways, depending on the circumstances. But you get the basic idea. Unlike some brokers, we don’t aggregate fractional orders. Every trade is treated as a separate order.
So go try it out. Get a slice of your favourite stocks and ETFs, and build a diverse portfolio.
*As of 29th March 2022
All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.