Invest in US Stocks: How to invest in US stocks from India? If this is what you are pondering about, you are most likely not alone. Going by the most up-to-date AMFI information, an escalating quantity of investors in India are seeking to invest abroad. When it comes to investing via mutual funds, Fund of Funds (FoF) that are investing overseas are an quickly obtainable supply for Indian investors who want to diversify their domestic portfolio.
Back in August 2020, there have been about 3.21 lakh quantity of Folios in FoFs ( funds investing abroad), when on August 31, 2021, the quantity rose close to 10.32 lakh. The Net Assets Under Management grew from about Rs 5000 crore to practically Rs 21000 more than the exact same period of 1 year.
International mutual funds or overseas funds have been obtainable to Indian investors for a extended time but the reputation appears to have gone up in the current previous. “Indian Mutual Funds are offering global Fund of Funds in India. The NAV is in Indian Rupees and the minimum investment is Rs 5000. These adhere to the Indian Mutual Fund Regulations and are a cost effective way of investing abroad,” informs Ashish Ranawade, Head of Products, Emkay Wealth Management.
Thanks to the US FED infusing stimulus soon after the outbreak of Covid-19, the international liquidity led stock market place rally across nations brought in a bigger interest in investing in equity markets abroad. Some of the top tech giants of the world listed on the Nasdaq stock exchange have been on the front top the bull run more than the previous 18 months. The continuous run of most US stocks, mainly the FAANG stocks have now reached the Indian shores and is providing an chance to investors to diversify abroad.
You can acquire stocks listed on US stock market place indices such as Nasdaqone hundred or S&P 500 or any other US index. The course of action is uncomplicated and it requires a couple of days to open a foreign trading account with any international brokerage firm. Once the account is open, you can acquire shares of Tesla or any other stock with a click-of-a button comparable to obtaining shares in India. It is also attainable to acquire US shares in fractions as Fractional Investing is permitted in the US stock market place.
Also, there are largely all huge fund homes in India supplying international funds via which you can invest abroad. Some of them are FoFs when some other folks could be Feeder Funds.
In the case of FoF, you will invest in a scheme of a fund residence which in turn will invest in units of international schemes or ETFs. By investing in the FoF of the Indian fund homes, you get exposure to international corporations. Such FoF could also be obtainable in the type of ETFs and can have varying themes. “ A couple of ETFs have also been offered in India, which are also a very efficient and effective way of investing abroad,” adds Ashish. Some may well be passive funds tracking an international stock market place index or some could be benchmarked against a particular sector.
Some prominent overseas funds for investing abroad
HDFC Developed World Indexes Fund of Funds (NFO)
Aditya Birla Sun Life International Equity Fund
Mirae Asset Great Consumer Fund
Aditya Birla Sun Life Commodities Equities Fund – Global Agri Plan
ICICI Prudential US Bluechip Equity Fund
Nippon India US Equity Opportunities Fund
Nippon India Japan Equity Fund
Aditya Birla Sun Life International Equity Fund
Franklin Asian Equity Fund
Motilal Oswal Nasdaq one hundred Fund of Fund
PRINCIPAL Global Opportunities Fund
DSP World Energy Fund
Edelweiss US Technology Equity
Edelweiss US Value Equity Offshore Fund
Aditya Birla Sun Life Global Excellence Equity
Invesco India Feeder – Invesco Global Equity Income Fund
Franklin India Feeder – Franklin U.S. Opportunities Fund
Invesco India Feeder – Invesco Pan European Equity Fund
DSP US Flexible Equity Fund Fund of Funds-Overseas
Aditya Birla Sun Life Global Emerging Opportunities Fund
DSP World Mining Fund Fund of Funds-Overseas
PGIM India Emerging Markets Equity Fund
ICICI Prudential Global Stable Equity Fund
DSP World Agriculture Fund
Franklin India Feeder – Templeton European Opportunities Fund
Kotak Global Emerging Market Fund
HSBC Global Emerging Markets Fund
ICICI Prudential Global Advantage Fund
HSBC Asia Pacific (Ex Japan) Dividend Yield Fund
Edelweiss Emerging Markets Opportunities Equity Offshore Fund
Edelweiss Greater China Equity Offshore Fund
DSP Global Allocation Fund
HSBC Brazil Fund
DSP World Gold Fund
For newcomers seeking to invest abroad, in order to diversify their portfolio, can take into account FoF or ETFs. “ETFs are very well diversified as well. Only those investors who feel confident of their acumen and ability to track companies should invest directly. For those making a beginning, ETFS and Global Funds are a better way to invest. For example, in the case of pharma companies, it would have made sense to invest in the entire pharma basket rather than one company because we don’t know which company would have been successful in developing a cure / vaccine for Covid 19. The ETF options available globally are far too many,” says Ashish.
Out of the total allocation that you want to do in international funds, you require to make a portfolio with direct stocks, ETFs and even funds with a popular theme. “One another reason why it makes sense to invest in a fund rather than an individual company is there are various listed Funds in the US markets following different themes and it makes sense to invest in a particular theme or a group of companies rather than a single company as it reduces the risk significantly in case a particular technology were to fail or get disrupted,” says Ashish.