Simplified regulatory norms have made it possible for investors to seek diversification towards international mutual funds and stocks for their wealth diversification needs.
To a large extent our digital lives have been taken over by technology companies. From Apple, Amazon, Facebook to Netflix to the ubiquitous search engine Google, we are slowly getting hooked on to their products and services all across the country. But, as an investor in the Indian stock market, have you ever given a thought to owning the shares of these global giants?
“Global leaders such as Facebook, Google, Netflix, Apple, etc. have users across the world, including India. As a customer of a company that’s doing well, there’s a natural urge to want to include them in your portfolio, and benefit from their growth,” says Prateek Mehta, Co-Founder and Chief Business Officer, Scripbox.
In fact, there are innumerable international brands that we use in India but not all could be listed on NSE or BSE. Surely, the thought of investing in international companies must have crossed your mind, but the ways and means to go about investing in the US stocks could have been a deterrent.
Of late, more and more Indian investors are latching on to the opportunities available in the US markets. “Investing in US stocks has been all the rage recently and with good reason, “says Prateek. The Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX) and Google (GOOGL) stocks are collectively referred to as FAANG stocks.
Remember, the US Fed’s liquidity programme to tackle economic woes back in 2020 and the work-from-home environment has a big role to play in the global asset prices. Fed is expected to keep taking steps to help bring back economy to shape. And, with US economy back on track, the US stocks are expected to be the lead runners of the next bull run.
Besides this, the reason to geographically diversify one’s portfolio into global stocks is a strong enough reason to bring stability and high risk-adjusted return in your portfolio.
If you are looking to invest abroad, there’s international brokerage platforms that can give you the access to US stock market. Once you open a foreign trading account, stocks and ETFs listed on the leading US indices such as Nasdaq, DOW 30 or the S&P 500 will just be a click-away. “We have recently partnered with Stockal, a global investing platform, to offer US stocks to our customers. We had been offering US equity based mutual funds as a solution previously. However, with this new partnership, users can invest conveniently from their Scripbox accounts in stocks of leading global companies listed in the US stock exchange, along with Index ETFs,” informs Prateek.
But, is it too complicated and complex to begin with? “Simplified regulatory norms have made it possible for investors to seek diversification towards international mutual funds and stocks for their wealth diversification needs. Companies like Stockal have further simplified the process, from guiding customers on KYC related concerns to providing customer care in local (Indian) time zones. For us at Scripbox, as a full stack wealth management service, our role has been to partner with our customers for their wealth creation needs, and through our partnership with Stockal, we’re able to bring this additional investment avenue to them,” says Prateek.
Jumping on to the US stocks need to be a well-crafted affair. Allocating some portion towards US stocks can help you bring in the diversification to your portfolio. Adding global leaders in their respective industries to your stock portfolio can be something you don’t want to miss on. You can start with large-cap individual stocks or with ETFs tracking Nasdaq or the S&P 500 indexes. Whether you are a trader or a long term investor, the money making opportunities are in plenty in the US stock market.
However, akin to all stock market investing, there are inherent risks to investing in US stocks. “While investing in international markets does have a number of benefits, such as portfolio diversification and superior returns, there is an element of risk as well. A good wealth manager can advise on whether your portfolio would benefit from investing in international equities,” adds Prateek.