Looking for Low Brokerage, High Margin & Free Tips?
How To Invest In Foreign Stocks
| | Investing | No Comments
Check All Investment Services
A seasoned investor will know the importance of diversifying their investment portfolio and therefore we are here with the best information on how to invest in foreign stocks.
On the contrary, the majority of rookie Indian investors keep their portfolio limited to Indian stocks. This is a bit of a worrying fact.
We know, we know, you’re encountering a jamais vu moment here. Jamais Vu is the opposite of deja vu and means seeing something you have been encountering for years, with fresh eyes and perspective.
A question arises – How do you do that?
Well, there are multiple means to achieve that. Out of all those, one of the most overlooked ways is, by investing in foreign stocks.
Another question arises here. How exactly do you invest in foreign stocks as an Indian citizen? Consider yourself lucky, we’re here to simplify it for you.
How To Invest In Foreign Stocks From India?
Investors cherish the idea of investment opportunities in some of the mainstream MNCs such as Tesla, Microsoft, Amazon, Apple & Google.
These aren’t just MNCs, investors see them as the messiah to take them to investment paradise.
For any Indian investor looking ahead to learn how to invest in foreign stocks from India, here are some of the best methods :
- Foreign Portfolio Investment
- Mutual Funds
- ETFs
Foreign Portfolio Investment
The prime and the easiest amongst all the available options is Foreign Portfolio Investment.
This involves opening a trading account with an Indian stock investing platform that offers the facility to trade overseas.
For Instance – An Indian investor can reach out to NewYork based International investment platform, Stockal which has a partnership with one of the most popular full-service investment firms i.e. HDFC Securities to open a global investing account.
Just to provide you with a quick idea, Stockal offers its clients diverse investment opportunities in various asset classes through the medium of a single brokerage account.
This AI-powered platform provides investment ideas tailored exclusively for the clients.
The cherry on top, opting to open a global investment account with them gives you access to trade in stocks listed on The Big Board (nickname for New York Stock Exchange) and NASDAQ which are inarguably two of the biggest stock exchanges operating on the planet.
The uber-cool new feature of Stacks makes it possible for traders to invest in a combination of securities with a single transaction. Stacks are predefined baskets consisting of a combination of stocks, ETFs among other securities.
With Stacks, the platform intends to cater to every customer of any trading need. The variety in options definitely delivers on that promise.
They offer 4 types of Stacks :
- Thematic Stacks to keep an investor updated about the newest International development themes
- Expert Stacks is for investors who would want assistance in investing in portfolios established by industry professionals
- Industry Stacks allows the investor to get a taste of a number of industries
- Risk-adjusted Stacks will benefit the investor in choosing the portfolio based on their willingness to take risks
Some of the features of Stacks include:
- A Stack can be bought or sold with literally just a single click.
- Each Stock as a basket will contain 10 to 30 securities.
- Stacks are treated as a single entity in itself and likewise can be managed as a single unit in your portfolio.
- Automated rebalancing – STACKs are rebalanced at periodic intervals by the portfolio manager. So the customer need not worry about this.
Foreign Investment Account
Foreign Investment Account is a magical carpet that will lead Indian investors to the wonderland of foreign stock markets.
The setting up process for such account involves the following steps:
- Visit the website of Stockal.
- Then proceed to fill the form by submitting your basic details.
- Choose your subscription plan and make the payment.
- Provide the stockbroker with your KYC details and photocopies of the mandatory documents. The list of which is mentioned later in this review.
Global investment account usually takes up to 2-3 business days to get approved.
After which you can transfer money into your brokerage account from your bank account to begin trading.
Investing in the US stocks is quite common among investors as they get high returns in it. And it is possible to do so through stockbrokers like Groww, Angel One, etc.
Suppose you chose Groww for this purpose, you must keep in mind the Groww US stocks charges clearly. It’s because it will help you calculate your exact profit during investing.
Foreign Investment Account Documents
The list of documents for opening a Foreign Investment account may differ from stockbroker to stockbroker.
However, the documents required for opening a global investment account more or less consist of :
- ID Proof – PAN Card or Aadhaar Card
- Address Proof – Aadhaar Card, Passport, Driving License, Ration Card, Voter ID, Telephone Bill, Electricity Bill, College Id Card with mention of Hostel Address. Once your account is approved, to transfer funds from your bank account to the investment account – fill in the form A2. A digital copy of this form is available on the platform.
- Form A2 – A2 Form is a mandatory declaration form to remit funds abroad.
Mutual Funds That Invest In Foreign Stocks
The second option on the list through which investors can trade in foreign stocks is opting for global mutual funds.
Global mutual funds have a portfolio of foreign stocks thus they are pricier than domestic stocks.
ETFs that Invest In Foreign Stocks
Last on the list is International ETFs. These are similar in operation to the global mutual funds.
Global Investing Benefits
Moving on to discussing the global investing benefits.
For starters, it acts as a cushion against the volatility in the domestic stock markets. In addition to this, global investing benefits include :
- Bigger Market – Foreign stock markets allow access to a wider market. Bigger market translates into bigger opportunities. US Stocks account for over 50% of the global market-capitalization and US markets are home to some of the largest businesses in the world.
- Exchange Rate – Investing in foreign stocks offers the investor the chance to register bigger margins on profit due to exchange rates. The Indian rupee has been depreciating against the US$ for the last 5 years – by investing in US markets, investors can benefit from this.
Conclusion
Investing in Foreign stocks is lucrative. There is no doubt about it!
There are perks such as a bigger playing ground in the form of bigger stock markets with more options to invest. Of course, the road isn’t straightforward and there are a couple of elements to take care of.
One is choosing the right mode to enter the foreign stocks market, depending upon the choice whether you opted for gaining access through availing the services of a domestic stockbroker offering the facility to trade in foreign stocks has further intricacies involved.
Yes, there are a few drawbacks but the benefits of investing in foreign stocks overpower those problems pretty easily. In simpler terms, why would you want to hold yourself up by investing in just the Indian stocks.
Go out there, there is a big world of investing and with Stockal, this aspect can be made much simpler.
In case you are interested in going ahead with the stock market investments, let us assist you in taking the next steps ahead: