A fractional share is a portion of a full share of a stock or other financial asset. Fractional shares allow investors to own a fraction or a percentage of a share, rather than having to purchase whole shares. This concept has become more popular with the rise of online brokerage platforms and fintech services that offer fractional investing.

Here are key points about fractional shares:

1. **Fractional Investing:**
– Fractional shares enable investors to buy and own a piece of a stock or exchange-traded fund (ETF) with a value proportionate to the amount of money they are willing to invest. This makes it more accessible for investors with limited funds to diversify their portfolios.

2. **Online Brokerages:**
– Many online brokerage platforms and investment apps now offer fractional share trading. Investors can specify the dollar amount they want to invest in a particular stock or ETF, and the platform will automatically convert that amount into fractional shares.

3. **Dollar-Based Investing:**
– Fractional shares are often associated with dollar-based investing, where investors can allocate a specific dollar amount to an investment rather than buying a whole number of shares. This approach allows for more precise portfolio allocation.

4. **Diversification:**
– Fractional shares enable investors to diversify their portfolios across a wider range of assets, even if they don’t have enough capital to purchase full shares of higher-priced stocks. This diversification can help manage risk.

5. **Dividends and Voting Rights:**
– In most cases, investors who own fractional shares are entitled to receive dividends proportionate to their ownership. However, voting rights may be limited or not available for fractional shareholders, depending on the broker and the specific rules of the company issuing the stock.

6. **Market Accessibility:**
– Fractional shares make it easier for investors to access and invest in high-priced stocks, such as those in the technology sector, which may have stock prices in the hundreds or thousands of dollars per share.

7. **Reinvestment Programs:**
– Some dividend reinvestment programs (DRIPs) allow investors to reinvest their dividends into fractional shares, further compounding their investment over time.

8. **Platform-specific Policies:**
– Different brokerage platforms may have varying policies regarding fractional shares, including fees, minimum investment amounts, and the range of stocks or ETFs available for fractional trading.

It’s important for investors to be aware of the specific terms and conditions associated with fractional share trading on the platform they use. Fractional shares have made investing more accessible, particularly for small investors or those looking to build diversified portfolios with limited funds.