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What Are Fractional Shares?



Indexopedia Research Team
By Indexopedia Research Team | January 30, 2025 | In

Fractional ownership is owning less than one whole share. For example, if an investor purchases $50 of a $100 stock, they will own half a share. Investors in fractional shares receive ownership rights like dividends and capital gains in proportion to the amount of fractional shares owned. Investing in an ETF can save investors the time and effort of trying to build a well-diversified portfolio on their own, especially with small amounts of money or limited knowledge. ETFs offer a simple way to gain exposure to various assets with a single purchase. In both cases, investors gain partial ownership of various assets, allowing for diversified exposure without needing to purchase full shares of each individual stock. ETFs provide access to specific index strategies that track market performance or sectors. Fractional shares of ETFs can be purchased, which can add further diversification to your portfolio. Benefits of Fractional Shares Fractional shares offer several advantages. First, they make investing in high-priced stocks more accessible. Instead of needing $395 to buy a full share of an expensive stock like Tesla (TSLA), investors can still gain exposure to high

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