Hello Readers!
US-based Technology companies are consistently expanding their market share. The analysis focuses mainly on the shares of five which are probably part of your daily lives – Facebook, Apple, Amazon, Netflix, and Google (Alphabet).
The stock prices of these companies have delivered anywhere between 50%-100% return since the lows of the market crash in March this year. All these are attracting Indian investors towards the overseas stocks, but here the question is, can anyone sitting in India, invest in those stocks which are listed in the US?
Well, yes, they can do it by investing in Feeder funds which are offered by domestic asset management companies in the mutual fund format. You invest in the domestic fund which in turn invests in an international fund that has a portfolio with these companies.
Now you know how you can participate in the profits generated by the US-based technology companies by sitting in India, but now, is it worth adding this to your portfolio too?
Right Age To invest In Overseas Funds!
Overseas funds or international funds are a good option to diversify your risk. This diversification can be done with the lowest possible amount through domestic feeder funds that allow you to invest as little as Rs 5000. And if we talk about e right age to invest in overseas funds, then there is no specific age mentioned anywhere that is categorized as the right age to invest in international funds.
Investing in overseas funds smoothen the risk of investing in a particular geography. However, if you are starting your investment journey then making international funds a part of your portfolio might be taken as too risky. And if you analyze, at the beginning of your investment journey, you may find a good opportunity for long term wealth creation through listed Indian equities itself.
Indian Equity funds provide a good opportunity for long-term wealth creation, however, to diversify and reduce the risk from your mutual funds, you can go allocating a small portion of your asset in overseas funds, by the start of your investment journey.
Is This The Right Time To Invest In Overseas Funds?
Due to the pandemic and its aftereffect on market, we all have been in dilemma, whether this is the right time to invest or not. Moreover, it is really difficult to time the Indian market, similarly, it is difficult to predict how the market prices move in the US, and hence, there is no point in trying to figure out if this is the right time or not.
However here it can be said that the global equity market will remain productive for years to come and allocating to good fund managers will be a useful long-term strategy.
So basically, we can conclude that you do not need to wait longer or time in the global market and find out the right time to invest, do it now and enhance the diversification in your portfolio. Allocate a small proportion to start and keep reviewing it with the change in your income, expense, and goals.
For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee of future returns).