XTB MENA, the Dubai based online investment platform, has announced the addition of fractional shares into its array of offerings in the UAE. This move will unlock new avenues to invest in the realm of equity markets, the broker said.
The advent of fractional shares is being touted as a strategic initiative by XTB MENA to optimize portfolio diversification, and concurrently contributing to the democratization of capital markets.
Traditionally inaccessible due to their exorbitant unit prices, shares of widely followed companies such as Netflix (exceeding USD 400) and Meta (surpassing USD 300) are now within reach for investors with modest capital portfolios, XTB said. This approach allows individuals to strategically invest even minimal amounts, facilitating a judicious investment strategy characterized by enhanced diversification.
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Achraf Drid, CEO – Middle East & North Africa at XTB, explained the reason behind launching fractional shares in the Middle East: “With fractional shares, we are removing barriers that previously hindered many of our Middle Eastern customers from participating in the stock market arena.”
What is fractional share trading?
Fractional shares empower investors to engage with high-value stocks like Berkshire Hathaway’s A-shares, currently trading at over USD 542,500. XTB’s fractional shares render investment in such prestigious entities feasible, even for those with limited financial resources, providing an opportunity to tap into the potential growth of iconic companies. Drid emphasized,
“We aim to foster an equity culture where private investors, irrespective of their portfolio size, can partake in the performance of companies they believe hold significant potential,” he said.
Moreover, XTB’s fractional shares distinguish themselves by representing genuine ownership of shares, rather than synthetic products. As such, investors are entitled to proportional dividend payments on the fractional shares held.
The fractional portion not owned by the investor is retained by XTB. With the minimum transaction value of EUR 10, investors can buy fractional shares, which are fiduciary rights to a part of a share or ETF listed on regulated markets.
What should also be highlighted is the absence of commissions for transactions involving fractional shares, provided they remain within the monthly limit of EUR 100,000.
In a move aligned with broader financial inclusivity goals, XTB’s introduction of fractional shares transcends conventional investment barriers, underscoring the platform’s commitment to facilitating accessible and diversified participation in the capital markets.
