How to Buy Samsung Stock on Fidelity: A Comprehensive Guide

So, you’re looking to add a titan of tech, a South Korean powerhouse, to your investment portfolio – specifically, Samsung. Excellent choice! But how do you navigate the sometimes-complex world of international stock ownership through a platform like Fidelity? Let’s break it down.

The short answer: You can’t directly buy Samsung Electronics (005930.KS), the primary listing, on Fidelity if you’re based in the U.S. This is because Samsung is listed on the Korea Exchange (KRX). However, you can invest in Samsung indirectly through alternative routes which we’ll explore below.

Understanding the Landscape: Direct vs. Indirect Investment

Why Can’t I Directly Buy 005930.KS on Fidelity?

Most U.S. brokerages, including Fidelity, typically provide access to stocks listed on major U.S. exchanges (like the NYSE and NASDAQ) and sometimes offer access to select international exchanges. However, direct access to the Korea Exchange (KRX), where Samsung Electronics is primarily listed, is usually not available to retail investors through these platforms. This is due to regulatory complexities, currency exchange considerations, and specific brokerage agreements.

Your Indirect Investment Options

Despite the direct inaccessibility, there are effective strategies to gain exposure to Samsung’s performance:

1. Samsung ADR (SSNLF/SSNGY): Samsung has an American Depositary Receipt (ADR) program. An ADR represents shares of a foreign company held by a U.S. depositary bank and allows U.S. investors to trade them as if they were domestic stocks. There are actually two types of Samsung ADRs: SSNLF (preferred shares) and SSNGY (ordinary shares). Fidelity allows you to purchase these ADRs. Just search for the ticker symbol and execute a trade as you would with any U.S.-listed stock.

2. Exchange-Traded Funds (ETFs): Many ETFs hold Samsung as part of their portfolio. These are diversified funds that track a specific index or sector, offering a way to indirectly invest in Samsung. Look for ETFs focused on emerging markets, Asian technology, or South Korea specifically. Fidelity offers a wide range of ETFs to choose from. You’ll need to research the ETF’s holdings to determine the percentage allocated to Samsung.

3. Mutual Funds: Similar to ETFs, some mutual funds include Samsung in their portfolio. Focus on funds specializing in international equities or Asian markets. Again, research the fund’s holdings to understand the extent of your exposure to Samsung.

Step-by-Step Guide to Buying Samsung ADRs on Fidelity

This is the most direct and common method for U.S. investors using Fidelity.

1. Log in to your Fidelity Account: Access your Fidelity account through the website or mobile app.

2. Navigate to the Trade Tab: Look for the “Trade” or “Place Order” option, typically found on the main navigation bar.

3. Enter the Ticker Symbol: In the trade ticket, enter either SSNLF or SSNGY, depending on which ADR you want to purchase. SSNLF represents preferred shares, which typically offer fixed dividends but limited voting rights, while SSNGY represents ordinary shares with voting rights.

4. Specify Order Type: Choose your order type. A “Market Order” will execute the trade at the current market price, while a “Limit Order” allows you to set a specific price at which you’re willing to buy.

5. Enter Quantity: Specify the number of shares you want to buy.

6. Review and Submit: Carefully review all order details to ensure accuracy before submitting the trade.

7. Confirm Execution: Once the order is executed, you’ll receive a confirmation. The shares will then appear in your Fidelity account.

Considerations Before Investing

Currency Fluctuations

ADRs and ETFs can be affected by currency fluctuations. The value of the Korean Won (KRW) relative to the U.S. dollar (USD) can impact the returns on your investment.

Political and Economic Risks

Investing in international companies carries inherent risks related to political and economic instability in the company’s home country.

Fees and Commissions

Be aware of any trading fees, commission charges, and foreign transaction fees associated with buying and selling ADRs or ETFs through Fidelity. Fidelity generally offers commission-free trading for stocks and ETFs, but it’s always wise to double-check.

Important Due Diligence

Before making any investment decisions, conduct thorough research on Samsung, the specific ADR you’re considering (SSNLF or SSNGY), or any ETFs or mutual funds that hold Samsung. Analyze their financial performance, industry trends, and potential risks. Consider consulting with a financial advisor to determine if investing in Samsung aligns with your overall investment goals and risk tolerance.

Frequently Asked Questions (FAQs)

1. What is an ADR, and how does it work?

An ADR is a certificate representing shares of a foreign company held by a U.S. depositary bank. It allows U.S. investors to trade foreign stocks on U.S. exchanges in U.S. dollars, simplifying the process and avoiding direct currency conversion.

2. What’s the difference between SSNLF and SSNGY?

SSNLF represents Samsung’s preferred shares, which typically offer fixed dividends but limited voting rights. SSNGY represents Samsung’s ordinary shares, which come with voting rights but may have variable dividend payouts.

3. Are there any tax implications of investing in Samsung ADRs?

Yes, dividends paid by Samsung to ADR holders are subject to Korean withholding tax. You may be able to claim a foreign tax credit on your U.S. tax return to offset some of this tax. Consult with a tax advisor for personalized guidance.

4. What are some ETFs that hold Samsung stock?

Some ETFs that may hold Samsung stock include:

• iShares MSCI Emerging Markets ETF (EEM)
• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares MSCI South Korea ETF (EWY)

Always verify the current holdings of any ETF before investing, as they can change over time.

5. How do currency fluctuations affect my investment in Samsung ADRs?

If the Korean Won (KRW) weakens against the U.S. dollar (USD), the value of your Samsung ADRs may decrease, even if Samsung’s stock price in Korea remains stable. Conversely, if the KRW strengthens, your ADRs could increase in value.

6. What are the risks associated with investing in emerging markets like South Korea?

Emerging markets can be more volatile than developed markets due to factors such as political instability, economic uncertainty, and currency fluctuations.

7. How much money do I need to start investing in Samsung ADRs on Fidelity?

You can buy as little as one share of SSNLF or SSNGY. The minimum investment will depend on the current share price.

8. Can I set up a dividend reinvestment plan (DRIP) for Samsung ADRs on Fidelity?

Yes, Fidelity offers dividend reinvestment plans (DRIPs). You can typically enroll in a DRIP through your Fidelity account settings.

9. Are there any alternative brokerage accounts I should consider for direct access to international exchanges?

While Fidelity doesn’t offer direct access to the KRX, some specialized international brokerage accounts may. Research brokers that explicitly offer access to the Korean stock market if that’s a priority.

10. How often does Samsung pay dividends?

Samsung typically pays dividends on a quarterly basis.

11. How do I research Samsung’s financial performance before investing?

You can find Samsung’s financial reports and investor relations information on their official website. Also, financial news websites and Fidelity’s research tools offer analyses of Samsung.

12. Should I consult with a financial advisor before investing in Samsung?

Consulting with a financial advisor is always a good idea, especially when investing in international stocks or complex financial products. They can help you assess your risk tolerance, investment goals, and overall portfolio strategy.