Should Australians Invest Directly in the US Stock Market When Buying US Shares? (And What Changes Are Coming to Wall Street)
Nick Donato is a financial adviser at Guidance Financial Services who specialises in helping clients all over Australia aged 30 to 50 get their financial foundations sorted, so they can build wealth and have more choice in life through our Wealth Builder program. You can learn more about it here.
In June, CommSec's investment arm took more than 28,000 applications from Australian retail investors who wanted a piece of the SpaceX float. That was the strongest interest it had ever recorded for any float, and roughly four times the bids for the biggest Australian IPO it had previously marketed.
SpaceX never listed on the ASX. It was a Nasdaq-only listing, so every one of those Australians was buying directly into Wall Street, and they needed an international shares account to do it.
Now Nasdaq has confirmed it wants to trade US shares almost around the clock, which would put those markets open while you are sitting at your desk here.
Paul Benson, Financial Advisor and Practice Principal at Guidance Financial Services, thinks that puts a question mark over the ASX as a standalone exchange.
But there is a more immediate question for anyone with a portfolio:
From 6 December 2026, Nasdaq plans to trade US shares 23 hours a day, five days a week, which would put US markets open during Australian business hours. That removes an inconvenience. It does not automatically make direct US investing the better option for you. The decision comes down to three things: your currency exposure, the total cost of owning the investment rather than the headline fee, and what your portfolio already holds. For most Australians it is not a choice between one market and the other.
We chatted all about it on Wealth Builder Podcast, and you can listen below.
Here is what is actually changing, and what I would look at before moving money offshore.
What is changing about US trading hours in December?
Nasdaq calls it their Always-On market. From 6 December 2026, they plan to run 23 hours a day, five days a week: trading opens 9pm Eastern Time on Sunday and runs through to 8pm Friday, with a one-hour pause each day between 8pm and 9pm for processing.
For us, 9pm Sunday in New York is about 1pm Monday on the east coast of Australia. So the US market would open in the middle of our working day.
The SEC approved Nasdaq's proposal earlier this year. The December launch still depends on infrastructure being ready, so treat the date as a plan rather than a certainty.
Nasdaq is not alone. The New York Stock Exchange has approval for a 22-hour day running from 1:30am to 11:30pm Eastern, and Cboe has flagged similar intentions. So by early next year, three of the biggest US exchanges may be open while we are awake.
What did the SpaceX float show about Australian demand?
It showed the appetite is already there, and that the plumbing already works.
SpaceX listed on Nasdaq in June at US$135 a share, valuing the company around US$1.75 trillion and raising roughly US$75 billion. It filed a separate Australian prospectus so local retail investors could take part, with CommSec as the lead Australian retail broker. Reports at the time put the Australian retail target at up to $1 billion.
The queues were real. CommSec's call centre ran through a long weekend and investors waited close to an hour to get through.
Two details matter more than the hype. There was no ASX listing, so Australians bought directly into a US exchange. And CommSec has since said it plans to bring more US floats to Australian clients, treating SpaceX as the model.
That is the direction of travel, well before anyone changes a trading hour.
Should I invest in US shares or Australian shares?
For most investors this does not need to be an either-or decision.
Australian shares and international shares do different jobs in a portfolio. The more useful question is how much you hold in each and whether that mix suits what you are trying to achieve.
The scale argument for the US is hard to ignore. On Nasdaq's own figures, US-listed companies make up around two-thirds of global market capitalisation, and foreign investors already hold roughly $17 trillion of US equities. It gives you access to companies and whole industries you cannot get meaningful exposure to through the ASX.
Australian shares still bring things a US listing cannot, and franking credits are the obvious one.
So I would not start with which market is better. I would start with what this money is for, and where my current exposure leaves me.
Do I still get franking credits if I invest in US shares?
No. Franking credits come from Australian companies that have already paid Australian company tax on the profits they are distributing. A US company has not paid Australian tax, so there is no credit to pass on.
Instead you have US withholding tax to deal with. Australian residents generally complete a W-8BEN form with their broker, which reduces the withholding rate on US dividends under the tax treaty between the two countries. You then report that income here.
This is one of the reasons I would not treat a lower ETF management fee as the deciding factor. If you are a retiree drawing income and franking credits are doing real work in your tax position, a cheaper US-listed fund can still leave you worse off.
Worth getting specific advice on this one, because it depends entirely on your own tax position rather than on which market looks better in the abstract.
Is it better to buy US ETFs on the ASX or directly in the US?
Right now, if you want exposure to something like the S&P 500, you can buy an ETF listed on the ASX. No US trading account needed. You can also buy the equivalent fund directly on a US exchange.
My colleague Paul's argument on the podcast is that the US-listed versions can carry lower management costs and far higher trading volumes, simply because of the size of that market. Once those markets are open during our business hours, one of the inconveniences of buying directly starts to disappear.
That still does not make it as simple as finding the lowest fee.
You are also picking up currency exposure, a US tax form, and another account to administer. A few basis points saved on a management fee is not much of a win if you have ignored a larger risk somewhere else in the portfolio.
What are the risks of buying US shares from Australia?
Currency is the first thing I would look at, and it was the question I put to my colleague Paul when we recorded this.
If you convert Australian dollars into US dollars to invest, the exchange rate affects what the investment is worth when you eventually bring the money home. Say the investment performs well in US-dollar terms, but the Australian dollar has strengthened by the time you sell and convert back. Some of that return disappears. It works the other way too. Currency can add to your result.
The point is you now have a second moving part, and it works independently of whether you picked good companies.
Paul's counter on the podcast was that you do not have to convert back straight away. If the money is staying invested offshore for years, you can leave it in US dollars and choose when to bring it home. That helps, but it is a timing decision you have taken on, not one you have removed.
Is overnight US trading riskier?
It can be, and the safeguards being built around it tell you as much.
Trading volumes outside standard US hours have historically been small. Thin liquidity means wider gaps between the buying and selling price, and it takes less money to push a price around. Nasdaq is introducing price bands that reject orders outside set limits, along with restrictions on certain order types during the overnight session.
Nasdaq has also been clear that the regular 9:30am to 4pm session in New York stays the primary price-setting window, through its opening and closing auctions. The overnight session is extra trading, not the main event.
Then there is the behavioural risk, which nobody builds a safeguard for. SpaceX shares slipped below their issue price within weeks of listing. Rachel Waterhouse, chief executive of the Australian Shareholders' Association, warned before the float that "strong brand recognition does not automatically make something a good investment."
A market open at 1pm makes it easier to act on a headline you read at 12:55.
Does it matter which stock exchange I invest through?
Probably less than most people assume, and this was the most interesting part of our conversation.
Think about how you buy shares now. You log in, place the order, and you almost certainly do not know which exchange it was routed through. The ASX has had a competitor here for years. Most investors never noticed.
When it comes to diversification, what matters is what you own. The spread of companies, countries and sectors does the work, not the venue you bought them through.
SpaceX makes the point better than I can. It entered the Nasdaq 100 in early July, on about its fifteenth trading day. Anyone holding a Nasdaq 100 tracker, including inside their super, picked up exposure to it without applying for a single share or opening an international account.
The exchange is the marketplace. The investment is what gives you the exposure.
That distinction matters more if you start using overseas exchanges regularly, because the temptation is to confuse buying in a new place with owning something new.
Will the ASX still exist in three years?
My colleague Paul's view, on the podcast, is that the ASX's days as a standalone entity are numbered. He said he would be surprised if it is still independent in three years. That is his prediction, not a forecast anyone should build a portfolio around.
The argument behind it is reasonable, though. Most major European exchanges have already consolidated. The Singapore Exchange tried to take over the ASX in 2010, and then Treasurer Wayne Swan blocked the roughly $8.4 billion deal in April 2011 on national interest grounds. The ASX has also spent years and a great deal of money trying to replace its ageing CHESS settlement system.
Then there is the listings question. Atlassian, our largest software company, listed in the US and not here.
For you as an investor, the practical point is smaller than the headline. Australian companies do not vanish if the exchange changes hands. Your shares would still be your shares.
Is investing directly in US shares actually cheaper?
Sometimes. But cheaper is not the same as the management fee printed on a fact sheet.
Brokerage is the clearest difference. My colleague Paul's estimate on the podcast was that Australian brokerage typically runs $20 to $30 a trade, while zero-brokerage accounts are common in the US. On a small, regular investment, that gap is real.
The full cost of owning something offshore also includes:
the ETF or fund management fee
foreign exchange costs each time you convert
the bid-ask spread when you buy and sell
your tax treatment, including US withholding
the admin of running a second account and reporting it here
Currency conversion is the one people underestimate, because it applies going in and coming out.
The lowest headline fee may still be the sensible choice. I just would not pick an investment on that number alone. It has to earn its place in the portfolio.
How do I know if my investment portfolio is right for me?
This matters more than whether the ASX is still independent in three years.
Most portfolios I see were not designed. They accumulated. You buy some Australian shares. You add an international ETF a few years later. You top up whatever has been performing well. Your super sits somewhere else again, invested differently.
Eventually you own a collection of investments without a strategy tying them together. The question then is not whether US markets are open at 1pm. It is whether you know why you own what you own.
Answering that means looking at your Australian and international exposure together, the risk you are actually carrying, your super, your debt and your tax position.
At Guidance Financial Services, that is how we approach investment advice, and you can learn more about how we invest here.
If you would like an adviser to look at your investment strategy and the wider financial picture, you can book an appointment with us below.
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Frequently asked questions
Can I buy US shares from Australia right now? Yes. Most major Australian brokers, including CommSec, already offer access to US markets. What changes in December is that those markets would be open during Australian business hours, so you can place a trade and see it executed rather than sending an order into a closed market.
Do I pay Australian tax on US shares? As an Australian resident for tax purposes, you generally pay Australian tax on your worldwide income, including US dividends and capital gains. US dividends are usually subject to US withholding tax first, and you may be able to claim a foreign income tax offset here. Your own situation determines how this works, so get advice specific to you.
What is a W-8BEN form? It is a US tax form that confirms you are not a US resident. Completing it with your broker reduces the rate of US withholding tax applied to your dividends under the Australia-US tax treaty. Brokers offering US trading typically prompt you to complete it when you open the account.
Will the overnight session set share prices? No. Nasdaq has said the regular 9:30am to 4pm Eastern session remains the primary price-setting period through its opening and closing auctions. The overnight session is additional trading, not the main event.
Is the 6 December 2026 date confirmed? Nasdaq has stated 6 December 2026 as its target and the SEC approved the proposal, but the launch depends on supporting market infrastructure being ready. It is a firm plan rather than a guarantee.
This article is for educational purposes only and does not take into account your individual circumstances. If you would like tailored advice, we can help you work through the numbers properly.
