Where are the ETFs listed?

[Ato]

Hello

I'm a newbie here, and a newbie at this financial stuff.

I've recently been thinking that it would be a good idea to start doing something about my financial situation. I live and work in Japan but am an Australian citizen (Perth boy originally). I work with a few other non-Japanese people from around the world. One of my colleagues is American. We were talking at length about trading and finance the other day. He mentioned that he used Ameritrade to do his trades through. I tried to make an account with them, but alas you need a US residential address, which I dont have. So I have been looking at Australian sites like CommSec, ETrade Australia, etc.

However, I seem to be having a problem locating various ETFs, for example, that I like the look of. I'm wondering if I'm not looking in the correct place, or if the ones I'm looking at are located within the US market and cant be gotten from using companies like CommSec or ETrade Australia as they are limited to what's listed on the ASX. As an example, I was looking for:
Rogers International Commodity Index – Agriculture ELEMENTS ETN (RJA)
(I cant link yet, but you can find this ETF on the site Seeking Alpha, which as per the warning I dont endorse, nor do I endorse the specific ETF mentioned here.)
Is that ETF, RJA, simply not available from Australian companies? Or am I just not searching correctly?

If it's the former, could someone please explain how markets/stockmarkets work like that (country restrictions etc)? If the latter, could you please show me how to search properly?

Also, I was hoping to find a company that had low cost trades, like the compnay my friend uses, Ameritrade, does. Are there any recommended companies out there with low cost trades, preferably ones that I can do via online/email?

 

[alphaman]

Sign up with Interactive Brokers. It's the easiest and cheapest way to gain access to all the US-listed ETFs.

 

[Ato]

Sign up with Interactive Brokers. It's the easiest and cheapest way to gain access to all the US-listed ETFs.

Actually funny you should mention them. Another fellow Aussie colleague mentioned them to me yesterday. But on the account signup page it has the following:

Welcome to the IB electronic registration system. Our accounts are geared towards professional traders and investors, and we require the following for all customers:
* Good or extensive product knowledge for any product you wish to trade.

* Prior execution of 100 or more trades (any product).

* A minimum equity deposit in cash or stock of USD 10,000 (or USD equivalent) or USD 4,000 for IRA Accounts.

That kind of scared me away. For example, the second point there about trades, how do you prove it? (Not that I have any trades at all mind you)

Also, would I make an account in Japan, or would it exist in the US? How would I deal with taxes - deal with US tax system or Japanese? Tbh, I dont like the idea of making an account in the US, nor dealing with their tax system. I've no connection with the US, and if at some point in the future the government decides to take all my money there, I couldnt do a damn thing. At least I have connections to Japan & Australia.

Anyway, I sound negative towards that company, but if my concerns were answered then I'd certainly consider it.

 

[Temjin]

* Good or extensive product knowledge for any product you wish to trade

* Prior execution of 100 or more trades (any product).

That kind of scared me away. For example, the second point there about trades, how do you prove it? (Not that I have any trades at all mind you)

Trust me, you can "make" up stuff for these two criteria. They do not have a system in place to confirm them anyway, in particular the first one.

Also, would I make an account in Japan, or would it exist in the US? How would I deal with taxes - deal with US tax system or Japanese? Tbh, I dont like the idea of making an account in the US, nor dealing with their tax system. I've no connection with the US, and if at some point in the future the government decides to take all my money there, I couldnt do a damn thing. At least I have connections to Japan & Australia.

Anyway, I sound negative towards that company, but if my concerns were answered then I'd certainly consider it.

The account would exist in the US and you will be dealing with whatever taxes you may need to pay in the principle resident location. You will need to ask for further professional advices in Japan and understand if there are any international agreements between them and the US.

As for Australia, at least to my understanding and dealing so far, I don't have to pay any tax to the US for my profits made in my account. Obviously, I have to report it to Australia under certain rules.

But don't be negative toward the company, it's one of the best out there at least for retail investors/traders. Their financial security is quite strong as well.

As for list of ETFs you can trade, visit

www.seekingalpha.com

www.etftrends.com

Good luck

Temjin

 

[Ato]

The account would exist in the US and you will be dealing with whatever taxes you may need to pay in the principle resident location. You will need to ask for further professional advices in Japan and understand if there are any international agreements between them and the US.

As for Australia, at least to my understanding and dealing so far, I don't have to pay any tax to the US for my profits made in my account. Obviously, I have to report it to Australia under certain rules.

But don't be negative toward the company, it's one of the best out there at least for retail investors/traders. Their financial security is quite strong as well.

As for list of ETFs you can trade, visit

seekingalpha

etftrends

Good luck

Temjin

Yeah I visit SeekingAlpha on a daily basis. It's not a bad site. I'll investigate the other one.

If the account is located in the US, dont I have to be a US resident? I'm really concerned about opening an account to store money in, in a country where I have no legal rights whatsoever. What kind of security measures do they offer? The account also has to have a minimum of $USD10000 in there. Lastly, the account itself is not free. You have to do a minimum number of trades per month or they charge you fees. I'm not sure I'd do the minimum number each month to be honest. I'm a total newbie at all this, I'm definitely not someone whom they might describe as "professional", at least not yet

 

[chrislp]

If the account is located in the US, dont I have to be a US resident?

No.

I'm really concerned about opening an account to store money in, in a country where I have no legal rights whatsoever. What kind of security measures do they offer?

Please see link below, it outlines the security measures they have in place.

http://www.interactivebrokers.com/en/general/about/ibgStrength.php?ib_entity=llc

Lastly, the account itself is not free. You have to do a minimum number of trades per month or they charge you fees.

The data is not free, if you select not to have market data then there is no fee associated with it. No other fees that I am aware of if you don't regularly trade.

 

[Ato]

Goodo, thanks. Skimming over the security measures, and it does look pretty safe, barring some tinfoil hat government conspiracy act I suppose.

The fees bit I got from here:

Monthly Activity

As IB caters to active professional traders and investors, we require that each account generate a minimum of commissions per month. Accounts generating commissions of an amount that is less than the minimum as stated below in any given month will be assessed the difference as a monthly activity fee. Please note that the monthly activity fee may be met solely by commissions and not fees related to third-party assessments such as market data subscriptions or order modification/cancellation fees.

In addition to monthly fee minimums we pass through market data fees from the exchanges for any real-time market data service in which a customer subscribes. Customers choosing to subscribe to US non-professional real-time market data will have the USD 10 (or USD equivalent) monthly market data subscription fee waived if they spend USD 30 (or USD equivalent) or more in commission for the month.

Customer Type Activity Fee Minimum
All customers not listed below USD 10
Age 25 or under USD 3
Customer with equity balances < USD 2,000
(or USD equivalent) USD 20

 

[Ato]

Ok, now I can link threads, here's the link to the fees thing above:

http://www.interactivebrokers.com/en/accounts/fees/minimumDeposits.php?ib_entity=llc

 

[chrislp]

I didn't realise their was a minimum sorry.

 

[Ato]

No worries. Looking at it, it's not that much.

I think I do like the company, looking at it on more detail, but I think I might figure out exactly what I want to do before opening an account.

Anyone know anything about ETFs being restricted within markets? Am I correct in thinking that I cant get ones I might like on SeekingAlpha within the Aussie market?

 

[alphaman]

ASX's ETF market is primitive. You can see the lists here:

http://www.asx.com.au/products/etfs_etcs/index.htm

 

[Smurf1976]

ETPMAG - that ASX site says it's a silver ETC and I'm interested in investing a small amount. But trying to get a quote on Etrade says it doesn't exist.

What to do?

 

[So_Cynical]

There's some good reading on Metal - EFT's at this site.

http://www.etfsecurities.com/au/about/etfs_about.asp

 

[MRC & Co]

Be careful, ETFs do not always track performance of the underlying and correlations can vary dramatically.

Also, remember to take into account currencies, if you are going to trade a USD denominated asset class (such as gold or oil) or invest abroad. May want to hedge your currency exposure off, if you don't have a view on currency movements.

 

[Temjin]

Yep, there is the minimum activity fee that you need to pay and can be waived in full or partial through commissions and/or subscription to any market data at any given month. So be aware of the cost involved.

Anyone know anything about ETFs being restricted within markets? Am I correct in thinking that I cant get ones I might like on SeekingAlpha within the Aussie market?

No, you can practically almost invest in any ETFs ever mentioned/reviewed on SeekingAlpha. Most ETFs are resided on popular, major exchanges that can be accessed through trading permissions setting in your account management screen.

In other words, the world of ETFs are in your hand in a single account.

Be careful, ETFs do not always track performance of the underlying and correlations can vary dramatically.

Also, remember to take into account currencies, if you are going to trade a USD denominated asset class (such as gold or oil) or invest abroad. May want to hedge your currency exposure off, if you don't have a view on currency movements.

Yes, especially with leveraged ETFs. Only TRADE THEM SHORT TERM, NEVER HOLD THEM FOR LONG TERM. You will find more articles explaining why on seekingalpha or etftrends.

As for currencies hedging, this is a more complex issue.

When you open your account, your base currency may be in AUD or in any other currencies. IB simply convert your deposit fund into whatever base curreny you specified. (I think! I kept my AUD)

Depending on your settings, when you purchase non-base currency dominated shares, you will be borrowing the underlying non-base currency at their listed rates. (i.e. you buy ETFs quoted in USD, you automatically borrow USD to buy it and incur borrowing cost during the length of holding)
This method allow automatic hedging in that you are not exposed to any curreny risk for the initial purchase value. However, any profits/losses generated from the share will NOT be hedged unless you do it manually. (by either borrowing more USD or more AUD)

Of course, your other alternative is that it would automatically convert your AUD into the right amount of USD used to buy those shares. You will then be exposed to curreny risk in that if the shares in USD rise but the value of USD drops against AUD, your potential profit might be muted or even wiped out.

Please note I AM NOT RECOMMENDING any two methods. You should consult with your own financial advisor before investing in any of these products and understand the risks involved, especially currency ones.