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Want a share in the profits of Apple or Facebook? Learn how you can invest in foreign stocks at home

You can invest in foreign stocks through mutual funds or directly through stock exchanges and fintech apps. Experts recommend investing 10 to 30% of your portfolio in global stocks for diversification.

Over the past few years, the trend of investing in foreign stocks has increased among Indians. This can be gauged from the fact that market regulator SEBI had to suspend investment in foreign stocks by mutual funds (MFs) as the maximum investment limit set by it was met.

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However, mutual funds are not the only way to invest in foreign stocks. This can also be done directly through stock exchanges and fintech apps. In the fiscal year 2022, Indians have invested $ 747 million abroad.

The current fall in overseas markets has provided an opportunity for Indian investors to invest at a cheaper valuation. Let us know in which ways you can invest in listed stocks abroad-

Mutual Funds

Mutual fund investments in foreign listed stocks have performed well. Mutual fund schemes with a focus on international stocks were managing assets of Rs 38,014 crore as on August 31, 2022. These schemes invest in global stocks, foreign stocks with a locality or a specific theme.

Mutual funds have emerged as one of the preferred avenues to invest abroad as the portfolio is managed by a professional. Along with this, it also gives you the facility of small amount and monthly SIP.

Investments made through these schemes are not covered under Liberalized Remittance Scheme (LRS) and are treated like any other investment in units of non-equity mutual fund schemes for the purpose of taxation. Is.

You can also buy stock directly

If you do not want to invest through mutual funds, you can also buy stocks directly. Several fintech companies like Winvesta, Stockcal, Vested Finance have made it easier to buy listed stocks overseas.

Some Indian brokerages have tied up with these fintech companies and allow their clients to invest abroad. In the US, you are also allowed to buy a fraction of the stock which makes even the expensive stocks accessible to Indian investors. Under the Liberalized Remittance Scheme (LRS), one can invest up to $2,50,000 in each financial year.

GIFT City: Gateway to Global Investment

The NSE IFSC of the National Stock Exchange and the India International Exchange (India INX), backed by the Bombay Stock Exchange, are two entities that allow investments abroad. India INX has tied up with Interactive Brokers and provides access to 135 exchanges abroad. It is like trading on any other fintech app.

NSE IFSC allows you to trade in Unsecured Depository Receipts (UDRs) issued against 50 select stocks listed in the US. Market participants in the US buy stocks in India in a predetermined ratio and issue UDRs. You can buy these and trades are settled in Gift City.

How much should you invest in foreign stocks?

Being a shareholder of companies like Google (Alphabet), Facebook (Meta), Microsoft and IBM is an interesting idea. It helps you to be a part of the profits of these global companies.

Experts recommend that 10 to 30 percent of your portfolio should be invested in global stocks for diversification perspective. The route you take and the amount of money you invest overseas will vary depending on the size of your portfolio, financial goals and timing of investment, as well as your risk appetite. For most retail investors, the mutual fund route may be better first.

If you are willing to invest money in equities overseas, don’t do it all at once. It is better to invest in moderation.

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