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International Trading Benefits
Diversifying with international equities offers the Canadian investor international exposure to:
- Global investment opportunities. Canadian equities constitute only about 4% of the developed world’s total market capitalization. In other words, the vast majority of global investment opportunities are beyond our borders.
- Greater variety of industries. International markets can provide industry breadth that the Canadian market may not offer. While Canada is known for its energy sector, it has rarely been known for its diversified presence in other areas such as healthcare or information technology.
- More top performing equities. Even in a global economy, the fortunes of countries do not move together. By diversifying internationally and adjusting the regional weightings of your portfolio, you gain exposure to countries with top performing markets.
International Trading Risks
Every investment has an element of risk. While geographic diversification is important, investing internationally presents certain risks that you’ll want to consider, including:
- Foreign accounting rules can be vastly different from North American accounting standards, particularly in those countries in emerging markets.
- Investing in foreign securities can have unfavourable tax implications, as well as higher trading costs.
- Currency fluctuations can affect returns.
- Information regarding international markets and investments may be less accessible and less timely, particularly in less developed markets with lower disclosure requirements and varying regulatory and political regimes.
1 HSBC InvestDirect is a division of HSBC Securities (Canada) Inc.
2 HSBC Premier eligibility requires you to have an active Premier chequing account and maintain a $100,000 balance in combined personal deposits and investments with HSBC Bank Canada and its subsidiaries. Monthly banking package fees may apply.
3 Available on online equity trades on North American markets. Subject to conditions. For more information on HSBC InvestDirect rates, visit www.investdirect.hsbc.ca.
4 International Equity trades made online, excluding Hong Kong, and all international trades placed on the phone qualify for the International Equities trade discount. Subject to minimum commission.
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