Moomoo Malaysia launches fractional shares

May 17, 2024 11:57 am UTC, Rick Steves

Moomoo Malaysia has announced the addition of fractional shares of more than 500 US stocks and ETFs on its platform. This means that users can now purchase a portion of a share, lowering the entry barrier for those looking to dip their toes into the stock market. By offering fractional shares of globally recognized companies, Moomoo Malaysia opens the door for a wider demographic to participate in the wealth generated by these giants.

Portfolio diversification and dollar-cost averaging strategies

The fractional investment model allows investors to distribute their capital across a diverse set of assets without being constrained by higher share prices. Diversification is key in managing risk and avoiding significant impacts from the volatility of a single stock or sector.

Fractional shares are ideal for implementing a dollar-cost averaging strategy, which involves regularly purchasing a fixed dollar amount of a particular investment, regardless of the share price. This method allows investors to accumulate more shares when prices are low and fewer when prices are high, thus averaging the cost over time.

Ivan Mok, CEO of Moomoo Malaysia, said: “Our platform is designed to support smart investment decisions, and the addition of fractional shares enhances this capability. We are excited to see how our users leverage this feature to build wealth and achieve their financial goals. With uncertainties over the rate cut schedule and the upcoming US presidential election, investors are keen to diversify their portfolios across different sectors. Buying fractional shares is equivalent to building your own thematic ETF, allowing for tailored exposure to sectors and trends that align with your personal investment strategies.”

New users are gifted a ‘Guaranteed’ Welcome Kit’ worth up to RM 1,200 and those who deposit RM 10,000 will receive fractional shares of top companies like Apple, Nvidia, Tesla, and TSMC, valued up to RM 420.

80% of Moomoo investors likely to reinvest their EPF 3 funds

A recent survey of Moomoo users, most of them between the ages 18-45, revealed that 80% of investors were likely to reinvest their EPF 3 (a savings account for retirement) funds into the stock market.

The study further found that two-thirds of respondents prioritized achieving financial freedom and retirement planning, with nearly 6 out of every 10 respondents indicating a likelihood to reinvest their EPF Account 3 funds for retirement purposes.

80% expressed interest in investing in stocks and ETFs in a shift towards more self-directed wealth accumulation strategies among local investors. The trend of investing in overseas markets is becoming more popular among local investors, Moomoo found.

“The survey results underscore a growing trend: young investors are keen to leverage their funds to build robust, future-oriented investment portfolios. By allowing investments in fractions, we eliminate the barrier of high share prices, enabling users to invest in premium stocks with minimal funds. This is particularly beneficial for young investors who are at the beginning of their investment journeys and those looking to diversify their portfolios to gain exposure to international equities, such as the Magnificent Seven stocks, with the flexibility to invest amounts that align with their financial comfort levels,” Ivan Mok stated. “It’s crucial that investors understand the significance of using their EPF funds wisely. These funds are intended for retirement, and while the opportunity to reinvest them can lead to greater returns, it must be approached with knowledge and caution. Our commitment extends beyond providing state-of-the-art trading tools. We aim to cultivate a well-informed investor community that can navigate the complexities of investing with confidence and precision.”