After introducing the commission-free investment, the Amsterdam-based company BUX is now seeking to normalize fractional investing in Europe. The neobroker announced on Monday that it has now become the first broker in the Netherlands to launch fractional investments to help invest in companies which otherwise often remain inaccessible.
BUX believes that the introduction of fractional investing in the Netherlands is the second step in building an investment culture alongside the culture of savings.
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What is fractional investing?
Currently, many investors with smaller portfolios cannot invest in a company, for example Amazon, which has a share price above $ 3,000, while still building a diversified portfolio. Split investing will allow these investors to buy a stock for a small amount of money.
Fractions of shares are partial shares of a company’s shares. Instead of owning one or more whole shares of the stock, the investor owns a part or a fraction of it. In the past, investors typically ended up with fractional shares only after a stock split, as brokers allowed only full shares to be purchased.
According to a report by Gallup, 2021, 56% of the American population invests in the stock markets. The number is much lower in the Netherlands where only 1.6 million (AFM, 2021) people invest in a population of over 17 million, which is about 9% of the total population.
What does this mean for investors?
According to research by the AFM, more than 50% of investors – who invest in the stock market themselves – have invested less than € 25,000. For example, an investor with a budget of $ 10,000 would also like to invest in Amazon, with a price above $ 3,000, and buy Amazon stock. Then 30 percent of the investment portfolio consists of Amazon.
For all of these investors, fractional investing will help them include fractions of stocks with high stock prices in a diversified portfolio. This prevents investors who do not have large sums of money to invest from relying too much of their investment portfolio on a stock with a high price.
BUX CEO Yorick Naeff explains: “With the launch of fractional investing, we are introducing a form of investing that is already used by many people in the United States, as the first broker in the Netherlands. Right now, even low-budget investors can build a diversified investment portfolio with fractions of shares of companies like Tesla, Alphabet, and Amazon. This can help more than half of Dutch investors who themselves invest in the stock market with a more diversified portfolio and a better long-term financial future. “
BUX clients can now fractionally invest in the 100 most popular US stocks through its BUX Zero investment app, starting at just € 10. Other US stocks will be available soon. In the near future, fractional investment in ETFs and European equities will also be possible in the BUX Zero app.
“Do more with your money”
Founded by Egbert Pronk, Joost van de Wijgerd, Nick Bortot and Robbert Bos, BUX is a neobroker and has been enabling Europeans to do more with their money in a simple and affordable way since 2014. The company claims to help new generations of investors and traders discover the world of financial markets. The company has more than 600,000 customers.
Currently, it offers three apps for exploring financial markets, including BUX Zero, its flagship platform that makes commission-free trading possible, allowing users to invest in the brands and companies that interest them.
The full range of BUX products, including BUX Crypto, which allows users to invest in real cryptocurrencies, and BUX X, where users can trade contracts for difference (CFDs), are available across Europe. .
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