For many NRIs, returning to India after attaining financial stability is a dream. In a similar way, a 33-year-old NRI is now asking for suggestions to improve his investment plan. He earns $5k per month. He already has 1 crore worth of investment back in India in the form of MF, real estate, and PF-PPF. He also has a solid emergency fund. The monthly portfolio includes $250 each in Indian large/mid-cap (FLIN) and American large-cap (VOO) ETFs, $100 each in Indian small-cap (SMIN) and U.S. small-cap (AVUV) funds, and $100 in gold through IAU. Additionally, $1,500 is directed toward bank savings with the intent to build a robust cash reserve before rebalancing.
New NRI investment strategy
byu/rapid_rancho innri
His major short-term goal is to have proper family financial planning and repay debts in India. However, his long-term plan depends on where he chooses to stay. If he is staying in the US, the aim is to purchase two properties and retire by 2042. If returning to India within the next two years, the goal shifts to acquiring one more property and retiring by 2047.
The Internet quickly reacted to the post. One user said, “Just keep it simple. $VTI and $IAU are enough.” Another noted, “I would suggest removing US smallcap one; historically, US small caps have not done so well (definitely not as well as India small caps). And increase allocation to SMIN. For the naysayers, 5y returns: VT 72%, SPY 101%, FLIN 99%, SMIN 162%. ” Meanwhile, a netizen explained, “US and India market allocation is 50:50… seems high considering historical returns and the currency effects. Something for you to think about. US growth/technology sectors (VGT/QQQ/QQQM) are full of innovative global companies which may provide better growth than Indian markets.
He further added, “For US market exposure, you may like to consider VOO and VGT/VUG combinations (also QQQ/QQQM/SMH and MGK/VONG/SCHG/FBCG/SPMO cover similar segments as VGT and VUG, respectively). US small caps have not been stellar performers over the last decade, but if you prefer that segment, you can also consider VXF (small & mid cap combination) or VTWO/IWM (Russell 2000 index). For Indian market exposure, you may consider GLIN (growth leaders) and/or INCO (consumer), since they have the right tilt to what you are looking for (India Growth story). Ultimately, it’s your decision. Good luck!” “Keep your cash in a high-yield account,” suggested another.