You can buy global stocks from home

To get good returns from other markets, all you have to do is invest in foreign stocks through your demat account

When Infosys shares in India have not been able to stand up to their mark, shares of IT firms such as Microsoft and Google have been helping shareholders make money on the international exchanges.

You too can do so — you can invest in the global equity markets and gain from the surge in global stocks.

A Balasubramanian, chief investment officer of Birla SunLife Mutual Fund, says, “In the Indian market, growth momentum is strong. Similarly, markets apart from India are also offering growth.

While the Indian markets have been giving good returns, there are other markets that are doing well too. Vietnam and other International markets too have giving phenomenal returns. Moreover, one needs to diversify investments across geographies.”

The Reserve Bank of India (RBI), has now allowed Indian individual investors to remit up to $200,000 each financial year in current and capital account transactions, which includes equity or global shares.

So it could be a good idea to invest that spare $1 million in foreign stocks. And now investing is relatively easy — all you need is your demat account. You could start with as little as Rs50,000 and depending on your returns, you can increase the amount you want to invest.

After the approval of the RBI, several products that help resident Indians invest in global exchanges have been launched. These include a global online trading platform and many other mutual funds.

The online trading provider ICICIDirect.com recently launched a facility for demat account holders to trade stocks listed on the US exchanges.

Account holders of ICICIDirect.com have to register for the overseas trading service and they can buy or sell shares listed on the US exchange using the same demat account that they use to trade in Indian stocks.

To assist an investor in selecting stocks to buy or sell, the firm provides information sourced from global new agencies. So a share of Google is just a click away for those willing to buy.

There are also American Depository Receipts (ADRs), which are non-American companies listed on the US exchanges that one can buy into through ICICIDirect.com. Non-US listed companies account for around 40 per cent of the total market capitalisation in the New York Stock Exchange (NYSE), according to S Mukherji, managing director and CEO, ICICI Securities.

For those looking at going through the mutual fund route, there are funds galore to choose from. There are funds such as Birla Sun Life International Equity, Sundaram BNP Paribas Global Advantage Fund, Principal Global Opportunities Fund, Fidelity International Opportunities Fund and DWS Global Thematic Offshore Fund, which invest across all sectors of stocks. Some of these funds invest in the funds floated by the international partner of the Indian fund house.

If you are a believer in the growth in Asian countries then there are a set of funds which invest exclusively in Asian countries. ABN AMRO China-India Fund, ICICI Prudential Indo Asia Equity Fund and the recently launched Franklin Asian Equity Fund are funds that invest in Asian economies alone.

Fund houses that found that realty and infrastructure are globally the driving force, have launched funds that invest in Indian and global infrastructure companies. ING Global Real Estate Fund, Kotak Indo World Infrastructure Fund and Tata Indo-Global Infrastructure Fund are these funds.

Sandesh Kirkire, chief executive officer of Kotak Mahindra Asset Management Company said, “India is an infrastructure story. Like wise, other emerging economies such as China too are driven by infrastructure.

Moreover, the growth happening in other infrastructure companies globally too is a result of their operations in emerging and other developing economies such as India and China. These are multi-national companies.”

Also, DSP Merrill Lynch World Gold Fund has a unique theme of investing in global companies involved in gold mining. Gold as we know has been hitting all-time highs recently benefiting the mining companies.

Most of the international equity schemes have been launched during the recent past, when the international markets have been affected. As a result, the returns of most of them, except the DSP Merrill Lynch World Gold Fund have been beaten down.

An investor investing outside India would essentially not put all his eggs in one basket. And that is the main reason why you should be looking to invest abroad so that the risks are geographically diversified.
d_khyati@dnaindia.net