A fractional share is “a fraction of a share", i.e less than one.
Lightyear offers the opportunity to buy fractional amounts for a lot of the shares we have on our platform to create more equal access to investing. Not everyone has the capital to invest in companies whose share price is in the hundreds or thousands per share. For example if a company had a listed share price of 1000 USD and it was available as a fractional share, you would be able to buy 0.1 of that share for 100 USD. This isn’t available for all shares but we’re working on increasing this range.
Do you pay dividends for applicable fractional shares?
Yes we do, rounded to the nearest cent. You’ll receive the relative percentage proportionate to the amount of the share you hold, e.g if you hold 0.5 of a dividend paying share you’ll receive 0.5 of the dividend amount.
To find out more about what dividends are and when we pay them, see our “Do you pay dividends” help article.
Risks of investing fractional shares
Fractional shares constitute a fraction of a single share in a company. This means that fractional shares are subject to the same risks as shares. In addition to that, certain ownership rights regarding fractional shares can be subject to a rounding risk. Fractional shares represent claims on the custodian who has undertaken the fractionalisation of the fractional shares. As such, fractional shares are not generally transferrable and in order to realise any value they represent you are obliged to sell them through the Lightyear app.