Samsung phones, TVs, laptops and appliances are easy to find and easy to purchase right here in the USA. The opposite is true when it comes to Samsung stock.
Because it’s a foreign company, Samsung Electronics Co. Ltd.’s shares aren’t for sale through the major U.S. exchanges like the Nasdaq and NYSE. And American investors aren’t allowed to purchase the bank-held version of Samsung stock (called global depository receipts, or GDRs), which are available to foreign investors elsewhere.
Buying Samsung in an ETF has benefits over simply buying Samsung stock.
That leaves you with three choices if you absolutely must get exposure to Samsung shares. The first two are admittedly tricky:
- If you can stomach the volatility, potential inability to buy or sell shares when you want and lack of timely financial reporting, you can trade them via the over-the-counter market under Samsung’s stock symbol, SSNLF. Purchasing these “pink sheet” stocks is akin to ordering from a food truck vendor that sells whatever they’ve scrounged up from the market each day for whatever price customers are willing to pay. Because the pink sheet market isn’t as regulated as the major stock exchanges, quality control isn’t as guarded and prices can vary widely based on supply and demand.
- Another option is to trade Samsung stock on the Korea Exchange (KRX), where it’s listed. This entails (take a deep breath) opening a South Korean brokerage account, which requires getting an Investors Registration Certificate through the country’s Financial Supervisory Service and designating a local custodian bank to conduct trades on your behalf. Oh, and be sure to keep an eye on currency exchange rates since you’ll be buying Samsung stock with South Korean won, not dollars.
If neither of those approaches sounds appealing, the third way is a little easier — and it may offer additional benefits over simply buying Samsung stock.
The simplest way to buy Samsung stock: in a bundle
For U.S. investors, the easiest and most cost-efficient path to Samsung stock ownership is to buy shares in a South Korea-focused exchange-traded fund. Like a mutual fund, an ETF is a single investment that holds a variety pack of stocks that all share some common trait, such as industry type, market cap or country of origin.
There is a handful of ETFs that count Samsung among their major holdings, including iShares MSCI South Korea ETF (which trades by the ticker symbol EWY), Xtrackers MSCI South Korea Hedged Equity Fund (DBKO) and Franklin FTSE South Korea ETF (FLKR).
Even though Samsung is just one of many stocks held in these ETFs, your exposure to the company isn’t as watered down as you might think: In the ETFs above, the company makes up 18% to 22% of each fund’s total value.
5 steps to buying a bit of Samsung
If Samsung stock were as simple to purchase as, say, its archrival Apple, we’d simply point you this brief guide on how to buy a stock and call it a day. But there are a few nuanced differences between buying Apple stock and buying Samsung stock — or rather, exposure to Samsung stock.
1. Understand the differences between an ETF and a stock
Although ETFs trade just like stocks via individual shares, their mutual fund-like traits require taking a slightly different approach to analyzing whether they should have a place in your portfolio.
Because the holdings are curated, there is a management fee, which is called an expense ratio, to consider and compare to the competition. The ETFs above currently charge expense ratios that range from 0.09% (Franklin FTSE) to 0.62% (iShares MSCI).
Also, take a look at the ETF’s holdings to be sure that the investments adhere to your investment objective. In this case, check that the Korea-focused ETF you choose has a meaningful weighting in Samsung stock. Here’s more on how ETFs work.
A lot of this research is easy to do via your brokerage’s website, which brings us to the next step …
2. Pick an investment account
If you don’t already have a brokerage account, you’ll need to open one. Although ETFs are standard fare among online discount brokers, trading commissions and ETF offerings vary by provider. It’s also worthwhile to check that a broker carries or provides access to any specific ETFs you’re after. See our analysis of the best brokers for ETF investing for some suggestions. Some of the winners from that analysis are also highlighted below.
3. Decide how many shares to purchase
At first blush this may seem like a budget-driven decision based on share price and how much cash you have to purchase a stock or ETF. But it’s actually more about your investment strategy, specifically how much exposure to any single type of investment you’re comfortable having in your portfolio.
Although ETFs are inherently diversified due to the number of holdings, a narrow investment focus — such as one that concentrates solely on large and medium-sized Korean technology companies — can make for a niche portfolio play. Be careful not to overexpose yourself to this or any other single, concentrated space.
4. Place your order
When you’re ready to place your order, you’ll be asked to choose an order type. Your answer determines when and how your order is executed.
- A market order places your trade right away by purchasing shares at the best available price that moment.
- A limit order places your trade when the stock (or ETF) hits the price level you’ve set.
Although we don’t recommend it for the majority of investors, if you decide to tread into the world of OTC trading, a limit order will help manage your exposure to pricing disparities due to share supply and demand.
5. Keep an eye on your investment
Even though Samsung stock is not easy to buy in the U.S., news about the company is in ample supply. Because of the company’s high-profile, publicly traded competitors, there’s a steady stream of headlines and analyst reports that refer to Samsung and the various industries in which it operates.
The deluge of news can be overwhelming, but don’t let it drive you to make knee-jerk investment decisions.
If you own an ETF with Samsung as just one of its holdings, you’re somewhat protected from the sharp ups and downs of any individual stock within that bundle. Still, it never hurts to keep an eye out in case trouble hits that sector or nation as a whole.