Over the last 12 months, Nifty 50, a leading Indian stock market index, is down by around 7%, while the S&P 500, the barometer of US stocks is up by nearly 24%. Further, the depreciation of the Indian Rupee against the US dollar has led to additional returns for Indian investors investing in US stocks.

One of the best ways to invest in the US stock market from India is to take exposure through exchange-traded funds or ETFs listed on US stock market exchanges.

Exchange Traded Funds combine the features of index funds with those of equities. Most ETFs are Index Funds since they track or benchmark to a specific index, and they are traded on exchanges, just like stocks.

Here are three ETFs that give you exposure to the US stock market:

S&P 500 index ETF

The S&P 500 is a stock market index that tracks the top 500 US companies, covering 80% of the market capitalization of all US stocks. S&P 500 index ETF offers investors a low-cost, high-liquid option to diversify their portfolio with large-cap U.S. stocks, instead of buying individual stocks.

Some of the top S&P 500 stocks are Apple, NVIDIA, Microsoft, Amazon, Meta, Alphabet, Tesla and Berkshire Hathaway.

Many S&P 500-based ETFs have given good returns like SPDR S&P 500 ETF Trust (SPY), Vanguard S&P 500 ETF (VOO), iShares Core S&P 500 ETF (IVV), SPDR Portfolio S&P 500 ETF (SPLG), Invesco S&P 500 Equal Weight ETF (RSP) with low expense ratio and good annual yield.

The SPDR S&P 500 ETF Trust (SPY), the world’s oldest and largest ETF, offers a low expense ratio of 0.0945%, making it an attractive option for investors seeking long-term returns.

NASDAQ 100 ETF

Nasdaq 100 is the world’s leading benchmark index for technology sector stocks. Most top blue-chip global IT companies like Nvidia, Apple, Amazon, Meta (Parent of Facebook), Alphabet ( Parent of Google), and Tesla, amongst many others, are listed on the Nasdaq-100 Index.

One may invest in the Invesco QQQ ETF with an annual expense of 0.20%, to own Nasdaq 100 stocks for diversification into global tech stocks.

Dow Jones Industrial Average (DJIA) ETF

The Dow Jones Industrial Average (DJIA) index, also known as the Dow 30 index, comprises the top 30 US-based companies, assessing the US economy, firms, and purchasing habits. SPDR Dow Jones Industrial Average ETF Trust (DIA) is the best ETF for investors looking to replicate the Dow’s performance.

Diversification is crucial to investing in equities, especially globally, as not all economies exhibit similar performance over time. Investing across economies, particularly the USA, provides exposure to the world’s largest economy. Investing in ETFs requires a thorough evaluation of market indicators such as expense ratio, long-term performance, liquidity, price-to-NAV difference, tracking error, and dividend yield.

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