Is there any way to Buy Stocks in US market from India?

[NauticalTwilight]

Thank you for the detailed write up.
Very useful.

[abhijain]

kindly refer this beautiful presentation:

Top 10 International Moated Businesses: Semiconductor, Electric Vehicles, Bio-Tech, Casinos, etc.

While I am invested in US market thru motilal oswal nasdaq100 FOF and newly launched Mirae Asset FANG+ FOF, I was looking for direct investing into some of the stocks, due to some reason or the other.

While @Worldlywiseinvestors has mentioned that they will do a due diligence on which is the best platform, cost, compliance and safety wise, would request the community to throw their experience here on these aspects.
Reasonable charges and safety are my primary objectives.

PS: Zerodha has been trying to launch this offering for a long time, but not yet able to do so.So, I sense there would be something thats preventing them, which implies direct investing into US stocks from India is tricky.

[abhijain]

This is a very good initiative; hopefully it will take care of the high price and regulatory compliance that was a hinderance. Also, a pool of high quality US stocks is great to start with.

[RaahulR]

Groww also allows you to invest in US Stocks easily.

[Anil_Chadda]

Hi
Whats a Good and Economical for investing in USA Shares from India under all rules and regulations.

The objective is to build a USA Shares Portfolio over 5 years.

1. In USA some trading systems allow fractional shares
2. Over 5% years Forex will go up by atleast 30%
3. When redeemed will have benefit of Share appreciation and Forex
   Regards

[Tar]

Tar's Portfolio and Information Attic

Unless your ticket size per investment in US direct stocks is > 1 lakh, direct investing would not make sense as There are a lot of charges in deposit, withdraw, and transfers from INR to these Brokerage Accounts. Further the transaction fees on these is not free or the ones we are used to by Zerodha and like. So you will end up paying a lot in fees and other costs if you invest which causes your required return on your investment to up by a few percentage points. US markets is more sophis…

[patilkunalv]

Mirae Asset has recently launched the FANG+ ETF which I guess should be a very good place for you to invest. The FANG+ index consists of:
Facebook (FB) Amazon (AMZN) Apple (APPL) Netflix (NFLX) Google (GOOGL) Tesla’s (TSLA) Twitter’s (TWTR) NVIDIA (NVDA) Alibaba’s (BABA) Baidu (BIDU)

Also the expense ratio is 0.33% which is very competitive.

Thanks!

[Anil_Chadda]

Thanks for great guidance. Any funds you would recommend or bet on

[Anil_Chadda]

Sure, great pointers, will consider it.

I wish to move around 10% of my folio to USA FANG funds. Your thoughts

[Tar]

It depends on your investment horizon and risk profile and your investment goals. I would stick to index funds and spread my investments around DJI and Nasdaq. The reason I wouldn’t go for S&P 500 is cause it’s a market cap weighted index and investing in S&P 500 along with Nasdaq will mostly mean that you’re investing in same companies. DJI along with Nasdaq will give you good spread of companies.

Someone here mentioned FANG+ ETF as well but that’s again a very risky and highly concentrated passive investment option. Don’t go by the past returns of the FANG+ ETF, Tesla’s performance over the last 5 years highly skewes the return. Anyone who is opting to invest in FANG+ ETF is better off investing in Nasdaq ETF which offers higher returns at lower risk.

But all of this again depends on your risk profile, your investment goals and your investment horizon.

None of the above is investment advice, I am not a registered financial advisor, please do your own due diligence before investing

[Anil_Chadda]

Thanks, Risk appetite Moderate

Good suggestion on Nasdaq funds, any funds in India you can recommend
Regards

[Tar]

Motilal Oswal has a Nasdaq FoF, you will find it on any of the mutual fund apps. There are several more.

Search for a Nasdaq Index fund on any mutual fund app and check the expense ratio before investing. If it’s below 0.5 to 0.6 % then it’s a good fund to invest in.

Since all of these funds are passive index funds, doesn’t matter which one you choose. Just have to check for the cheapest one in terms of expense ratio.

[Anil_Chadda]

Thanks for the leads

[centrist]

I would recommend motilal n100 (nasdaq index) etf
nippon hngseng etf (honkong index)
and the upcoming mirae fang plus etf

all these can be purchased on particularly DOWN Days in sip mode and if it falls further buy more.

be more careful with fang + bcoz its highly concentrated.

nasdaq 100 index contrary to popular opinion (I used to think too) is not just tech stocks.

it has fantastic retail stocks like Costco too, pharma, biotech, fmcg (mondelez - Cadbury) etc

over the past one year I have realized index investing(both short term and long term) is low risk (relatively) and gives reasonable return without much headache.

and one can average down without much worry if the horizon is long term

i wonder why Microsoft is not part of mirae fang plus etf

[Anil_Chadda]

Thanks

Sure, I have noted all the inputs.

I feel FANG fund is designed to be very aggressive, Microsoft is currently on the sidelines of Tech

Most probably will split holdings between FANG and motilal n100
Regards

[findsachin80]

Yes please avoid direct investing…I have burnt my hands trying to do that…It’s a highly volatile market, especially the tech sector…Edelweiss Technology Fund of Funds is a good option.

[Anil_Chadda]

Thanks for your inputs. Will consider the suggestion
Regards

[rakbals]

I have been doing SIP into
a. Franklin India feeder - US oppurtunites fund
b. MOFS Nasdaq 100 ETF.

For direct equity, there are overheads which i am still exploring -Brokerage charges, Minimum Monthly brokerage, INR to USD conversion fee, (~2%) , USD to INR conversion fee again when you book profit and bring back.

Capital Tax is short term @ slab rate (< 2 years), Long term(> 2 years) is 20% with Indexation.

Dividends are taxed at slab rate. US will hold back 25% in NRA tax and the balance per your slab has to be paid by you and form 67 to be filled for claiming tax credit as per DDTA.

Hope this info helps

I need inputs on best brokerage in India and their plans. I came across IND money, Interactive brokers and checking it.

[Anil_Chadda]

Thanks a lot, with inputs from the Friends@ValuePickr, I have decided to go with Mirae FANG IFO. A bit aggressive and risky.

Almost Zero brokerage in India are UPSTOX and Zerodha

Traditionally I trade with HDFCSec but brokerage are Very High

[stanksali]

@rakbals After some study, I have chosen to pick Interactive Brokers as they are an established company with close to 50 years in business and they are themselves listed on the US stock exchange. Further, they also cover insurance for any issues on securities lost etc to the tune of KUSD 500 (max). With that said, the security of investing via IBKR is high. Seems this is the reason even Kotak has tied up with them. The most unique USP for IBKR is it offers trading across ALL the major stock exchanges in the world, not just US. Their website UI / performance is quite sad (not sure why) but their Trader Workstation is pretty good. However, note that IBKR doesn’t offer real time market data as their business model is to make money off of subscriptions to various market data feeds and AMCs. Their charges are USD 10 minimum per month (including offset for commissions).

Link: IBKR Fees Structure Summary

On the economics of investing in global companies, as @Tar rightly pointed out and also as I did in my own post on Global Investing couple of days ago (Post), the ticket has to be fairly large (subjective) to beat these costs. I use a minimum KUSD 1 threshold to transfer. I have incurred (please suggest if I have missed anything):

1. Transfer fees - 1K fixed option via ICICI MoneyTransfer
2. FX Conversion fees while sending USD from India to IBKR
3. Maintenance charges (link above)
4. Brokerage / commissions
5. FX conversion (if you want to invest in other than USD stocks, USD-CAD, USD-AUD, USD-CNY)
6. Remittance charges from US IBKR to India (not sure how much this is)
7. No charges levied by ICICI for processing but GST applicable on FX conversion (see link below)

Link: GST Rate Applicable on FX Conversion

Also, I think one think that needs correction in your post is that LTCG is flat 20% with indexation. There is no benefit of 10% in whatsoever manner as per IT act for investing in foreign equities! I have gone through sections 111A, 112 and 112A on IT portal and also multiple articles. Providing link for Cleartax as reference:

Tax - Brief Analysis of Section 111A, 112 and 112A of Income Tax

Cleartax - Clear Tax - Taxation on Foreign Equities

In essence, my inference on Global investing is that there is absolutely no point chasing regular invest returns which can be done in India at much better pricing / tax options. Most are better of investing directly in ETFs / MFs just to get Global diversification.

My strategy is to simply invest only in futuristic tech companies (trying to stay within my circle of competence) which are either early stage (speculative - say battery chemistries, lithium mining cos, telemedicne, teleinsurance etc) or growth stock (moderate to high risk but not speculative) companies that can at minimum 10-20x to 100x multiples to justify all the efforts, pain and costs. Of course, these strategies are for investor with extremely high risk appetite and that should bode well with (a) Overall allocation within the portfolio and (b) Diversification similar to what VCs do. Even if 3-4 of the 20 bets make it good in 10 years, it will all be worth it financially, especially if those 3-4 are from high conviction higher allocations one)