5 ways to invest in foreign stocks from India

Buying or investing in Nasdaq stocks, a popular index in the US stock market is catching up with Indian investors.

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Diversifying geographically helps to manage the risk-adjusted return of your portfolio.

There are many ways to invest in foreign stocks from India. And, it is absolutely legal to invest in international stocks including buying US stocks from India. Buying or investing in Nasdaq stocks, a popular index in the US stock market is catching up with Indian investors.

From direct stocks to mutual funds to exchange-traded funds, there are multiple options to bring diversification into your portfolio by investing abroad. In addition to diversifying across asset classes, market capitalization, sectors, etc within a country, diversifying geographically helps to manage the risk-adjusted return of your portfolio. The impact on global economies may not be the same and it is always better to remain diversified geographically to manage portfolio risk better.

Here are 5 ways to invest in the US stock market

International brokerages
Sitting here in India, you can buy US stocks in a similar manner by which you buy stocks listed on Nifty 50, Sensex or any other index. However, before you do so, you need to undergo some formalities of opening an international brokerage account, complete the RBI’s LRS requirements etc. For all this, you may get in touch with any foreign brokers in India such as Stockal, Vested Finance, Winvesta amongst others. Once the accounts are set up, you can buy US stocks or ETFs across sectors, and themes to diversify your domestic portfolio.

Also Read: How different is Nasdaq 100 from S&P 500 in terms of sector exposure and performance – Find out

International mutual funds
International mutual fund schemes are available that provides an access to go global and invest abroad. While some of these mutual fund schemes track Asia-pacific countries or Latin American indexes, most of the schemes track the US market. Some schemes invest partly in the US market only while maintaining positions in domestic stocks as well. However, of late the fund houses have been asked to go slow on collecting deposits for overseas funds. Read it here as to why the restrictions are in place.

Exchange-traded funds
Unlike mutual funds, the ETF units are traded on the stock exchange during trading hours. So, one can buy and sell ETF units the way one buys stocks anytime when the exchanges are open. Anyone with a demat account with any brokerage house can trade in ETF’s. There are several ETFs available that allow access to Nasdaq and other leading global indices.

Also Read: Meme Stocks Phenomenon: Bed, Bath and Beyond & other stocks that more than doubled money in quick-time

NSE IFSC
You can also buy direct US stocks on NSE International Exchange (NSE IFSC), a wholly-owned subsidiary of the National Stock Exchange of India. After opening your trading and demat account with NSE IFSC registered brokers, you can Transfer funds from your local bank account to NSE IFSC registered brokers’ bank account. Once the fund reflects in your broker’s account you are ready to trade on NSE IFSC US Stock platform.

India INX Global Access

The India International Exchange (IFSC) Limited (India INX), BSE’s international arm, also provides access to international stock. You can trade in global stocks including shares of major US-listed companies via its wholly owned subsidiary India INX Global Access. India INX proposes to offer stocks from the US, Canada, UK, Europe, Australia, and Japan, covering about 80 percent of the investing universe.

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