Indian investors looking to take exposure in US stocks may consider investing through mutual fund schemes available in India. There are several international mutual fund schemes that allow investors to bring in global diversification to their portfolio.
In addition, there are exchange traded funds (ETF) that help investors to invest abroad. “Indians have access to a variety of international mutual funds of which some offer access to actively managed investments into global securities while others offer access to broader as well as innovative thematic indices through ETFs and Fund of Funds,” says Nirav Karkera, Head of Research at Fisdom.
International mutual funds provide a cost-effective way to build a foreign portfolio with exposure across different sectors and global themes. “The easiest way to take exposure to US-based companies, especially the big-tech, is through mutual funds investing in global tech-oriented indices like the NASDAQ100 through ETFs or Fund of Funds. Many AMCs like Navi MF, Axis MF, Aditya Birla Sun Life MF and Motilal Oswal MF offer such funds,” says Karkera.
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“Another alternative for focused investing into giant tech companies of the US would be to invest through innovative, focused funds like Mirae Asset NYSE FANG+ ETF Fund of Fund. There are other funds that choose either the active or passive route to offer exposure to global stocks,” adds Karkera.
However, there’s a regulatory roadblock in the way. The total amount of overseas investment by the mutual fund sector is capped at $7 billion and the maximum amount of overseas investments that any mutual fund house may have is $1 billion. As the limit gets breached, many fund houses stop accepting fresh deposits. Therefore, not all fund houses may be accepting investments in international mutual funds.