Fractional Shares are a great way of innvesting into major companies and diversifying portfolio through buying parts of a company's share. Wealthsimple Trade allows its users to invest in fractional shares through their platform by visiting the "Fractional Shares" window.
As the term defines itself, a fractional share is a small part of a company's stock which is less than one full share of the company. Fractional shares are not openly tradeable on the stock exchange and are a prominent feature of major brokerage companies only for some major stcoks on the stock exchange.
An individual can use the feature to invest in the stock of a company whose stock price is higher than the capital available.
Let's go through some of the key benefits of buying fractional shares:
Fractional shares have the edge in affordability. An investor who desires to invest in top companies often encounters situations where the stock prices are even higher than the capital the individual desires to invest. In that case, the individual can use this feature to invest in top companies such that they get a fraction or part of the particular share they wish to invest in for their particular capital.
As fractional shares are more accessible to relatively small investors, owning them also entitles the particular individual to the dividend declared by the company. The owner of the fractional stock gets the deserved part of the dividend issued per stock as per the fractional quantity held by it. If an individual hold half a stock of a company, half of the dividend declared by the company is credited to the investor through the broker.
Investing in fractional shares enables one to put their capital into companies with high stock prices, thus leading to a vast diversification in one's portfolio as opportunities increase drastically.
Have you tried buying fractional shares on Wealthsimple Trade? How was your experience? Do share your feedback.