Investing in US Stocks Market Using Etoro for Malaysian: A Review

I bet you already heard about Etoro or at least you saw an advertisement about Etoro.

If you are Malaysian and wondering if to use Etoro services to invest in US stock, you can read on. This is my experience using their service to invest in US stock.

Since I mentioned that I’m going to start investing this year, I decided that I’m going to be investing in US stocks market instead of Malaysia Stocks market. I actually have an account with Maybank for oversea investment, however I feel it’s not practical for someone who just starting to invest and have little money to start with.

Maybank charges a flat rate of USD25 and some stamping fee, which is equivalent to RM102.56 at the time of writing. This is so impractical for me since I have so little money. I also plan to invest a little amount every month to build my investment portfolio So a broker with lower transaction fee is needed to execute my plan.

To execute my plan, Etoro was choosen as my investment Platform in the US. I might use other platform like TD Ameritrade but for the time being, I will Etoro until I have a bigger Investment account.

Why US Stock Market Instead Of Malaysia Stock Market?

1. As we all know, investing in Malaysia stock market require a purchase of minimum of 1 lot which is equivalent to 100 shares while in US market, they can allow of purchase of share as minimum of 1 share.

There are also broker which allow fractional share purchase. Example, you are interested to invest in Tesla (Ticker: $TSLA) but the price at the time of writing is $700.00. Instead of forking out $700.00 to buy 1 share of Tesla, you can invest lower than that, you’ll own a fractional of the share.

If I wanted to invest in Malaysia with say Digi.Com, their share is about MYR4.00. Times that with 100 shares, I will need at least RM400 to be invested before transaction fee.

I don’t have that money to be invested every month, so I will choose a market which I can put a smaller amount to be invested. I can’t wait either as people say the earlier you start, the better.

2. Taking advantage of the foreign exchange between US Dollar and Malaysian Ringgit. As we all see, the exchange rate between US Dollar and Malaysian Ringgit seems to increase little by little.

The 10 year chart below shows that 1 US Dollar 10 years ago was about MYR3.00. Now 1 US Dollar is around Myr3.50 to MYR4.00. This might not be the case in the future but for now it seems like this is how it is.

Assuming if I able to accumulate share of Icahn Enterprises LP (Ticker: $IEP) of say 2 share and it pays $8 per share, I will have $11 dividend (Consider 30% withholding tax), that is already MYR40.00, accumulate the share for a few years and reinvesting the dividend, you’ll see the difference.

3. US is the home of a lot of big great conglomerate which so big they have businesses around the world. These company have a lot of potential to grow, who don’t want to invest in these great company and ride their growth together?

Is Etoro Legit in Malaysia?

I see that people are searching if Etoro can be use in Malaysia and whether Etoro can be trusted.

Review from Etoro website shows that they are regulated from top tier of financial institution. For Malaysian user, will be under the Australia Securities and Investments Commissions. You can change it to others during registration but it advisable to stick under ASIC.

eToro’s brokering services are provided by eToro (Europe) Ltd. (“eToro Europe”), a registered Cypriot Investment Firm (CIF). The company’s registration number is HE20058.

eToro Europe is regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 109/10.

In the UK, eToro (UK) Ltd. (“eToro UK”),  company registration no. 7973792 is authorised and regulated by the Financial Conduct Authority (FCA), under firm reference number 583263.

eToro Europe and eToro UK both operate under and comply with the Markets in Financial Instruments Directive (MiFID).

In Australia, services and products are provided by eToro AUS Capital Pty Ltd. (“eToro Australia”), ABN 66 612 791 803 is the holder of an Australian Financial Services Licence (AFSL) 491139 issued by the Australian Securities and Investments Commission (ASIC), and regulated under the Corporations Act (Commonwealth). eToro Australia arranges for its clients to be provided services by eToro Europe.

If they are regulated by ASIC, I can trust them enough and should not be worried. However please bear in mind that they are included in Malaysia Securities Commission investor alert as carrying out capital market activities in Malaysia without license.

As far as I know only local bank have these license but as I mentioned before, their transaction fee is too much for a small time investor. If someone have a lot of capital to start with, there should be no issue with the transaction fee.

Registration and Usage?

1. Registration

Registration is very simple, If I remember correctly I registered in less than 10 minutes. Just make sure to get yourself fully verified before depositing any money.

2. Usability

After using the service for about 5 month now, I found the interface is very easy to use and simple. The only issue I found is that there are less information for educations/research. You can only check their basic stats and the chart. You don’t have fancy research.

However, there’s a lot of people who are sharing their idea and research which makes it a good place of sharing investing and trading idea.

3. Deposit and Withdrawal

For deposits, Malaysian investor and trader minimum first time deposit is $200. Any subsequent deposits will be $50. The easiest way to deposit is using your debit card. Bank transfer was also available previously but its already terminated.

For every withdrawal, there will be charges of $5.

Edit: As of September 2021, I have tried to make a withdrawal to Maybank Malaysia account, it took about 3-4 days for the fund to appear in my Maybank account.

Also there is exchange rate charges – I couldn’t figure out how much they charge on the exchange rate but I have tried to withdraw USD1025, and according to the publicly available rates, there is USD25 differences.

4. Assets Availability for investing or trade

Etoro have a numbers of selection from Stocks, cryptocurrency, forex and commodities. But not assets listed is available on the platform. Example, some of the stocks listed in Nasdaq/Nyse might be not available in Etoro.

However, from what I see, they are keep adding those stocks in their offering.

There are also about 17 Exchange you can trade or invest.

Conclusion

A legit company operating under ASIC, Etoro however are not licensed in Malaysia. If this is one of your concern, you might want to find an alternative.

The user interface also is very easy to understand and easy to use. You just have to study a bit and register on their virtual portfolio to learn how to use it. Once you know how to use it, it’ll be very easy.

I don’t have comment about their transaction fee. Their deposits also quite good, you’ll receive the same amount you transfer from your bank to their platform unlike some platform which have their own internal exchange rate.

The End

Overall, I like this platform even though there is still some room for improvement. I will continue using this platform and keep hodling those stocks to the moon.

Until then, happy trading!