Investing abroad in blue chip funds is the latest arriving avenues
discovered in established Indian portfolios which are diversifying into
blue chips funds like Apple, Microsoft, Citi Group, Coca Cola. These
companies over the past 5 months have increased at a considerable stock
price of 30%, whereas Indian blue chips like Maruti, HDFC Bank in the
past 5 months have appreciated around 18%. Due to the appreciating value
of stocks and keeping a close look on the P/E multiples of stocks,
wealth advisors in India have suggested that it is time for Indian
investors to look beyond Indian markets.
As far as the recent outrun of dollar is concerned where the
exchange rate is rallying at Rs 54/- ( as on 16/05/2012 ) , trading in
the US markets could be a lot more of handling the currency
fluctuations. To overcome this high volatility of Rupee-Dollar, Indian
investors are investing in stocks which have capabilities to yield
20-30% profits annually. Since the domestic markets have subsequently
not given the best of returns as back since 2008 where the BSE noticed a
hard rally with domestic & foreign investors. In that year the
foreign investors pumped in nearly $17.5 billion in India, whereas the
domestic investors invested Rs 26,200 crores.
According to the Reserve Bank Of India, Indian investors can rope
in Rs 1,00,00,000 for investment in other developed emerging economies
on an annual basis. The procedure for investing abroad is a very
simplified process by opening a demat account with brokers in the city
like Kotak Securities & icicidirect.com, which enable foreign trade
with completing the "Know You Client" process which is to ensure the
safety of the demat account holder in accordance with the broker
records. The brokerage charges are generally lower for funds which are
domiciled overseas whereas Indian brokerage charges are roughly a
percentage of the entire transaction.
There are many funding opportunities available for investments
abroad, Direct Investments in blue-chip stocks remains to be the popular
one. The other avenues are Mutual funds, Index futures like Nasdaq100
& Feeder funds launched by Indian Mutual funds. Another major area
for investments are the Exchange traded funds (ETFs) which is
particularly when am investor feels bullish particularly on one
country's growth. For an exposure of ETFs within India itself is very
much viable as there are few which are on Indian stock exchanges track
foreign indices such as Nasdaq100 and Hang Seng.
Few essentials to be kept in mind while investing on the global
platform is that the tax treatment on every investment product is
different. Therefore, to ensure payment of taxes along with investing
in the fund requires appropriate tracking of the various change in
policies which might take place abroad. Also it is very important to
manage currency values depending on the financial market one is
investing in. Though the investment value for investing outside India is
very high, but over the coming years the investing horizons have
broadened. Recent initiatives like the BRICSMART have also noticed an
increase in demand of Indian Investors dawning the foreign markets.
No comments:
Post a Comment