There are several good reasons to invest in or trade Airbus stock. This European aerospace corporation has maintained a duopoly with Boeing in the market for passenger aircraft. The growth of commercial aviation is also positive due to the growth of tourism. It also has a specific division focused on manufacturing helicopters and another division focused on defense and space. The company is a large-cap stock with some of the characteristics of a growth stock and features of a defensive stock. This makes it ideal for a portfolio designed for either growth investing or defensive investing. However, because it is a public company traded in European stock exchanges, those from the United States or outside the European Union might wonder how and where to buy shares of Airbus. This article provides a definitive guide to investing in Airbus stock.
Investing in Airbus Stock from the United States and Outside the European Union: A Guide for American and Global Investors
The shares of Airbus are traded on the Paris Stock Exchange, the Frankfurt Stock Exchange, and four other regional stock exchanges in Spain to include the Bolsa de Madrid, Bolsa de Bilbao, Bolsa de Barcelona, and Bolsa de Valencia. It is also a component of the German DAX equity index, the French CAC 40 equity index, and the EURO STOXX 50 of the Eurozone. Non-EU investors interested in buying or trading Airbus stock have several routes to choose from. Take note of the following:
1. Online Stock Brokers
Most major online brokers based in the United States and elsewhere offer access to international stock markets. These include the overall stock market and specific stock exchanges in the European Union or those with access to the pan-European bourse Euronext. Remember that Airbus is a large and publicly traded company. It is included in the listings of Euronext and is commonly traded via popular online brokers and their respective trading platforms.
Some of the most notable examples of brokers based in the U.S. are Charles Schwab, E-Trade, Fidelity Investment, Interactive Brokers, and Robinhood. Other brokers outside the U.S. include United Kingdom-based Trading 212, the Ireland-based AvaTrade, and the Denmark-based Saxo Bank. Take note that it is not important where the broker is headquartered as long as its platform welcomes international investors and traders and offers Airbus stock.
Nevertheless, when it comes to choosing a broker, it is important to consider several factors. The first is that it should have an online platform that allows investors from other countries to buy and sell shares or stocks of companies. It should also provide real-time quotes and execution for Euronext listings. An interested investor should also research commission fees, inactivity fees, and any minimum investment requirements before opening an account.
2. Investment or Pooled Funds
Another option to invest in Airbus stock is through pooled funds. Take note that there are different types of pooled funds. These include exchange-traded funds or ETFs, mutual funds or MFs, and unit investment trusts or UITs. Another somewhat related type of financial product is a unit-linked or universal life insurance product. These pooled funds have more specific types labeled based on the composition of their holdings. Choose a fund that invests in equities.
There are various ETFs that include Airbus stock in their holdings. These include Xtrackers MSCI Eurozone Hedged Equity ETF, Capital Group International Focus Equity ETF Share Class, and GSEU – Goldman Sachs ActiveBeta Europe Equity ETF. The same is true for MFs and UITs. These include funds that track the German DAX equity index, the French CAC 40 equity index, or the EURO STOXX 50, or invest in ETFs composed of top Eurozone stocks.
It is important to underscore the fact that investing in pooled funds is different from investing in stocks because it does not translate to direct ownership of the shares. There are also funds that are actively managed in which their holdings are modified to meet a specific investment goal. Funds that track the equity or stock indices of the European Union are the best option because indices are more likely to retain Airbus stock in their respective components.
3. Depositary Receipt
There is another route for investing in foreign public companies without going through the usual process involved in stock investing or investing in pooled funds. This is via a depositary receipt or DR. A particular DR is a negotiable financial security that represents a share of a foreign public company. It is typically issued by a local bank of the local investor. This local bank essentially allows local investors to invest in foreign stocks via depositary receipts.
Several banks and financial institutions in the U.S. issue American depositary receipts of Airbus. These include Citi and Deutsche Bank Americas. Take note that these depositary receipts are traded on the over-the-counter market under the ticker EADSY. Some local banks in other countries also issue depositary receipts of Airbus. It is also worth noting that online brokers like Charles Schwab, Fidelity, and TD Ameritrade handle the trades of these securities.
There are several advantages to buying depositary receipts instead of direct shares. One is that investors can invest using their local currencies. Depositary receipts are priced and traded using the currency where they are issued. It is important to first check the existence of an Airbus depositary receipt. Not all foreign companies have depositary receipts in all countries, and not all local financial institutions issue depositary receipts of foreign companies.
