US markets have been doing well continuously since 2009 and are outperforming Indian markets in terms of returns(in terms of the index). Indians can’t invest directly in US markets but they can do it indirectly through the mutual fund route
You can directly also deal with US equities through US-based international brokers. But that is a complex process you have to submit many documents, fund transfer process is not easy and the transactions charges are also relatively high. The easy way is the mutual fund route
Below are the five mutual mutuals in India that are focussed on US markets.
1. Kotak US Equity standard fund
2. DSP BlackRock US flexible equity fund
3.ICICI Prudential US Bluechip fund
Three things to note when you are investing in US market
- Return will fluctuate with currency price
Your investment in these mutual funds will be in rupee term but the funds will be investing in the US market in dollars. The Rupee-Dollar volatility will impact the returns also. Funds will do well when rupee depreciates and appreciating rupee will eat some returns.
2. Tax benefit only on holding period of three years
Investment in international funds is treated as debt investment. For equity funds, long term means one year but for debt fund, it means three years. You won’t get any tax benefit if you book profit before three years period.
3. Redemption takes more days
You can redeem your domestic funds quickly and the money gets credited to your bank account within 3 working days. International funds redemption take up to a week.
Disclaimer: The article is for information purpose only it’s not any investing advice. Kindly do your own research or consult your financial advisor before investing.
Abhishek is an Engineer MBA in Finance and Certified Research Analyst. He is an active trader and investor in the stock market since 2010. Follower of the philosophies of Warren Buffet and Peter Lynch in investing and trend following in trading.