For the risk-taking investor, there is no better route than directly investing in foreign stocks and ETFs. The RBI permits a sum of $2,00,000 per annum to be remitted overseas. Within this overall limit you may choose to buy global equities.
Currently, quite a few Indian brokers offer a platform (which redirects your transaction to a foreign broker) to trade in foreign equities listed in select global stock exchanges.
A good number of the large exchanges are covered. Investors have a stream of products to choose from — ranging from ETFs, stocks and options as well as REITs. This mode may not come cheap as quite a few brokerages require investors to deposit a sum upfront.
Mutual funds
For those not willing to directly take the dollar exposure, there are over two dozen mutual funds that offer exposure to international equities. Here, investors must be aware of the proportion of exposure that each fund takes aboard. There are a few funds, such as Templeton India Equity Income, that invest at least 65 per cent in Indian equities, to qualify as an ‘equity-oriented fund (relevant for capital gains purposes).
Others, such as Birla Sun Life International Equity or theme funds such as DSPBR World Mining Fund, do not constrain themselves in the above manner.
These funds, therefore, have higher exposure to foreign markets.
Capital gains treatment in these funds is similar to that of debt funds.
The third option is available through wealth managers though this may be restricted to high-net-worth individuals.
The wealth management arm of large global players such as Morgan Stanley or Merrill Lynch open their own international channels for private wealth clients to invest internationally.
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