From India, investors can access a wide variety of international stock markets. Furthermore, purchasing foreign stocks from India, or any other country, is entirely within the law. The trend of Indian investors purchasing or putting money into Nasdaq equities, a widely followed foreign stocks market index, is rising.
Investing in foreign markets provides several opportunities for portfolio diversification, including direct stock purchases, mutual funds, and exchange-traded funds. Diversifying your portfolio geographically can help you manage the risk-adjusted return of your investments and diversify across asset classes, market capitalization, sectors, etc., within a country. It is always best to be globally diversified to manage portfolio risk better, as the effect on global economies may differ.
Mutual Funds on a Global Scale:
It is possible to invest internationally through international mutual fund schemes. Some of these mutual fund schemes follow the markets in Asia and the Pacific or Latin America, while the vast majority follow the foreign stocks market. Some plans limit their overseas investments to the United States but hold local stock holdings. Fund companies have recently been ordered to hold down on accepting deposits for international funds. Learn more about the rationale behind the rules by clicking here.
Equity Investment Trusts:
Unlike mutual funds, ETF shares can be bought and sold during regular market hours. As with stock purchases, ETF shares can be bought and sold whenever the exchanges open. Any investor with a demat account at a brokerage firm can participate in ETF trading. The Nasdaq and other top worldwide indices can be accessed through various exchange-traded funds (ETFs).
Global Access to the India INX:
BSE’s international division, BSE India International Exchange (IFSC) Limited (India INX), is another option for trading overseas stocks. India INX Global Access, a wholly owned subsidiary, allows investors to trade in global stocks, including significant US-listed businesses’ shares. India INX plans to provide access to stock markets in the United States, Canada, the United Kingdom, Europe, Australia, and Japan, representing roughly 80% of the global investment market.
Foreign Stocks Exchange Brokers:
US equities can be purchased from India like shares of companies included in the Nifty 50, Sensex, or any other index can be purchased. Opening an overseas brokerage account, satisfying the LRS standards set by the RBI, etc., are all necessary preliminary steps. Foreign brokers in India include Stockal, Vested Finance, and Winvesta, but you are free to work with anybody you like for these purposes. Once your accounts are set up, you can diversify your domestic holdings by purchasing US equities or ETFs across sectors and themes.
Where to Find the NSE IFSC:
The National Stock Exchange of India’s wholly-owned subsidiary, NSE International Exchange (NSE IFSC), allows direct purchases of US stocks. Once you’ve opened a trading and Demat account with NSE IFSC registered brokers, you can fund it by transferring money from your local bank to the brokers’ bank account in the IFSC. You can begin trading on the NSE IFSC US Stock platform when the funds appear in your broker’s account.
Is It Risky to Buy Stocks from a Foreign Company?
The United States stock market is open to Indian investors. Investing in U.S. equities can be done in several different ways. A few of the most common choices include direct stocks, ETFs, and mutual funds. From India, you have two options for investing in US stocks: indirect and direct.
What Overseas Equities Should I Buy?
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ASML Investment:
The Netherlands-based ASML Holding (ASML -2.12%) is a market leader among machinery suppliers that produce semiconductors. Semiconductors are crucial not only to operating computers, mobile devices, and the hardware foundations for significant advances in artificial intelligence but also to operating cars, appliances, and a wide variety of other products and services.
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Project CD:
CD Projekt (OTGL.Y 0.29%), headquartered in Poland, is a major force in the video game market. The Witcher and Cyberpunk 2077 are two of the company’s most well-known titles, but the business also runs a marketplace and sharing platform for digitally disseminating games.
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MercadoLibre:
Regarding e-commerce and financial technology in Latin America, MercadoLibre (MELI -1.67%) is unrivaled. Although it was established and is experiencing rapid expansion in Argentina, most of the company’s activities and revenues are generated in Brazil and Mexico.
Despite macroeconomic obstacles, MercadoLibre has continued to develop sales quickly, and the company is even conducting a major hiring push when many other firms are lowering their employee counts. As e-commerce and financial technology continue to gain traction in Latin America, MercadoLibre has a tremendous opportunity to grow.
Conclusion
After the pandemic, trading in foreign stocks from India is as easy as doing anything online. Similar to buying Indian equities, but with the added flexibility of purchasing fractional shares. Top foreign stocks are much safer to put money into because their market capitalization is in the trillions of dollars.