Indians investing in US stocks now

Top 10 most preferred stocks by Indians in last 12 mths

Tesla - 25%

Apple - 16%

Amazon - 13%

Microsoft - 11%

Shopify - 7%

Facebook - 7%

Netflix - 6%

Google - 5%

Salesforce - 5%

Nvidia - 5%

Mumbai: The Covid-19 pandemic has shown us geography has become history and how some of the biggest tech giants - Facebook, Apple, Amazon, Netflix and Google - have become increasingly integral to the daily lives of urban aspirational Indians. Hence, they are rushing towards opening global investment accounts.

Yes, you heard it right. The US-based stock exchanges like New York Stock Exchange (NYSE) and Nasdaq have become the new destination for these new-age Indian stock investors. No matter if the Nasdaq-100 slumped to a two-month low on Wednesday, bringing its losses from a February peak to around eight per cent.

The US markets, especially Nasdaq, have had a good run in the past couple of years, generating increased interest among retail investors. Around six fund houses (Mirae Asset, Mahindra Manulife, Nippon India, Kotak Mahindra, HSBC and BNP Paribas) sought Sebi's permission to offer nine international schemes. PPFAS Mutual Fund was the first to launch Parag Parikh Flexi Cap MF nearly a decade ago. Neil Parag Parikh, Chairman and CEO, PPFAS Mutual Fund, said: "The positive point is that investors are realising that having some international diversification is beneficial, as it can reduce the volatility of the overall portfolio and provide good risk-adjusted returns. Also, one can invest in some truly innovative growing companies/sectors where there are no Indian equivalent companies". On the flip side, whenever an asset class, sector or theme is doing well, we will see money chase it. This has been the industry trend and behaviour of market participants for a long time, he added.

SBI Mutual Fund has recently launched SBI International Access - US Equity FoF, an open-ended Fund of Fund scheme that would invest in mutual fund scheme/ETFs that invest in US markets. The underlying scheme currently invests, amongst other themes, in companies that benefit from secular growth themes - 5G, Artificial Intelligence, Automation, Cloud Computing, and Internet of Things (IoT).

DP Singh, Chief Business Officer, SBI MF, said: "The NFO (which opened on March 01 to close on March 15) is designed as a solution to help investors gain by investing outside India. The fund also has a dedicated ESG team with proven track record of long-term wealth creation."

In 2020, Vested, a platform which facilitates Indian retail investors to invest in the US market, processed about 100 million in trading volume.

Viram Shah, co-founder & CEO, Vested Finance, said: "Across our platform, basically 100 million in trading volume that Indian investors did in the US market in 2020. This current year, we want to at least double or triple this trading volume."

The stocks that are very popular are the large technology brands. So, the likes of Apple, Google, Amazon are very popular. Then there is also Tesla, which is one of the favourites of the Indian investors, he said, adding, "the interest is increasing. And over time people will look to allocate about 10 to 15 per cent of their wealth internationally." Apart from diversification that helps to lower country-specific risk and a chance to enjoy a global currency portfolio, investors also get an opportunity to invest in the most powerful economic engine of the global economy, the US. "By accessing the US stock markets, which alone dominate more than 50 per cent of the global stock market capitalisation, one can tap into a vast spectrum of investment opportunities," says Shripal Shah, President & Head of Operation, Finance & Technology at Kotak Securities.