For domestic investors who seek better returns through exposure to global stocks, especially US markets, investment avenues have not just reached their doorsteps but decision making has also become quite simple, thanks to tailor-made portfolios.

With more retail investors getting interested in global stocks, exchanges, brokerages and intermediaries are launching products to facilitate trading and investments in them.

NSE, BSE through Gift City

NSE International Exchange, a wholly owned subsidiary of National Stock Exchange of India Ltd, recently announced that it will soon be facilitating trading in select US stocks through the NSE IFSC platform. The offering will be in the form of unsponsored depository receipts, it said.

BSE went one step ahead, as its subsidiary India International Exchange (IFSC) at Gift City said it will facilitate trading not just in major US-listed companies through India INX Global Access IFSC Ltd, but also stocks from Canada, the UK, Europe, Australia and Japan, covering about 80 per cent of the global investing universe.

Curated portfolios

Many domestic brokerages have tie-ups with global investment platforms such as Globalise, Stockal and Vested Finance to offer overseas products. A few of them now offer curated portfolios to investors, making stock selection decisions simpler.

ICICIdirect, a subsidiary of ICICI Securities, now offers its customers a route to invest in portfolios made up of US stocks and ETFs managed by Interactive Advisors, a US investment advisor. The stock baskets are based on models constructed by renowned global fund managers such as Global X- by Mirae Asset, State Street Global Advisors, Legg Mason (acquired by Franklin Templeton Investments) and Wisdom Tree.

Over 70 theme-based portfolios are already available for investors to choose from at ICICIdirect.com. These actively managed portfolios offer a host of differentiated basket of US stocks and Exchange-Traded Funds (ETF).

Global investing platform Stockal had also launched its curated portfolio service called Stacks a few months ago. It has almost 22 portfolios to choose from. According to the Stockal web site, US Tech Bluechip portfolio is most popular, and has given a CAGR return of 32.77 per cent in three-year period. Similarly, Globalise has launched its curated portfolio called Globes.

Overseas funds in vogue

Of late, mutual funds have been launching more funds focussed on overseas markets. In fact, 2021 seems to have flavour of such as funds with several fund houses including Invesco Global Consumer Trends FoF, Kotak Nasdaq 100 FoF, SBI International Access — US Equity FoF, Axis Global Innovation Fund of Fund, IDFC US Equity Fund of Fund, Kotak Global Innovation Fund of Fund, Kotak Global Innovation Fund of Fund and SBI International Access - US Equity FoF launching global funds.

Thanks to a slew of NFOs and interest in overseas funds, inflows into global funds have more than trebled in July to ₹2,490 crore against ₹755 crore in January, taking the overall inflows in the last seven months to ₹9,900 crore.

Word of caution

Though investing in overseas stocks has become easy now, investors should assess risks involved in them before venturing into this as they carry exchange rate risks on top of business risks. Exchanges and the regulator need to be alert on this front and educate investors on risks (such as country and currency) and tax implications.

For the novice, investments through mutual funds or curated portfolios are the best option. Investing through systematic investment plan (SIP) with a long-term aim can mitigate the risk and enhance overall portfolio return.

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