The United States economy has long been regarded as the primary engine of global growth. Some of the world’s largest corporations, which drive the global economy, are either headquartered in the United States or are publicly traded on the US stock exchanges. Indian investors investing in US stocks have been increasing in recent years due to the potential for higher returns and diversification of their investment portfolios.
The year-on-year data on the Vested platform reflects a growing engagement among investors. Active accounts on the platform have seen a 17% uptick, new deposits surged by 32%, and investments in the top 10 stocks, including tech giants like Facebook, Microsoft, Tesla, and others, leaped by 72%.
Tesla (TSLA) listed on the Nasdaq stock exchange is a popular US stock for Indians. TSLA is up by almost 78% in 2023.
The data suggests a rising trust and participation in global investment avenues among Indian investors. Additionally, the trading volume over the last 12 months has significantly increased, going from $220 million in 2022 (the entire year) to $320 million in 2023 (till October).
Vested’s offering, ‘Vests’, a suite of pre-defined portfolios, is also witnessing a close to 18% increase in new investments. This shows that people like the idea of having a helping hand in building their US portfolio.
Viram Shah, CEO of Vested Finance, says, “For Indian investors, the upbeat earnings narrative from the US market presents a silver lining, as it signifies a resilient global economy, which, in turn, could potentially impact both their India and US portfolios positively. Looking ahead, volatility in certain FAANGM stocks and geopolitical tensions could pose challenges, emphasizing the need for a balanced and well-diversified investment strategy.
So what should Indian investors do? Viram Shah says – For investors from India, there are three important things to keep in mind as they build their US portfolios:
It is important to have a diversified portfolio and not to put all your eggs in one basket. Geographic diversification is an important piece of diversification that’s missing in the majority of Indian investors’ portfolios and investing globally via the US markets provides that global diversification.
If you spend time researching individual companies, then look for solid businesses that are able to generate profits without taking on debt. ETFs are the best option to build one’s portfolio.
The US markets are a great way to get global exposure by investing in global companies as well as ETFs that invest in particular countries
Some interesting investing trends (As shared by Vested)
Investments in AI and Chip Companies
Investors are showing a growing interest in tech stocks this year, with a special focus on companies specializing in artificial intelligence and computer chips.
Investments in these sectors have jumped 46% in 2023 to a total of nearly $10 million compared to last year.
This trend includes popular AI stocks like Nvidia, TSMC, UiPath, and ASML.
Investments in big-tech companies [FAANGM]
Big Tech companies continue to increase in popularity, often abbreviated as FAANGM (Facebook,
Apple, Amazon, Netflix, Google, and Microsoft).
Investments here have risen by 33% in 2023 standing at over $40 million compared to 2022.
Tesla drives interest among new and active investors
Tesla continues to be a favorite for both seasoned and new investors.
About 10% of active investment accounts on Vested hold Tesla shares.
Even more interesting is that 12% of new investors in the US markets from India start by buying Tesla on Vested.
ETFs are catching up with the momentum but some stand out. Although investments in Exchange-Traded Funds (ETFs) are growing at a slower pace compared to individual stocks, certain ETFs are bucking the trend. QQQM and SQQQ, for instance, have seen a whopping 300% increase in investments this year.
In summary, 2023 is a strong year for tech investments, with AI and chip stocks leading the charge and Tesla continuing to be a popular choice.
