After Information Technology giant Apple Inc. announced a massive USD 110 billion share buyback program, Indian investors are more enthusiastic about investing in US stocks. After the share buyback program, Apple's (AAPL) stocks have surged by 6.25 per cent to USD 183.84 per share, reaching price levels not seen since February 2024. A share buyback means companies use funds to buy back their shares from the market, and after Apple announces the share buyback it reduces the number of outstanding shares. The move will thus boost the value of the remaining shares and so investors look forward to tapping into such US stocks.
For Indian investors looking for scrips like Apple or similar US stocks, several avenues exist, ranging from brokerage applications, and mutual funds to ETFs. But be careful that investments in US stocks are subject to India-US dollar currency fluctuations, which may impact returns if the rupee depreciates against the US dollar.
Brokerages
Brokerage firms like Grow, Upstox, Kotak Securities, HDFC Securities, and ICICI Direct offer Indian retail investors the chance to invest in the US market through partnerships with foreign brokers.
To invest in US stocks, you can open an overseas trading account with domestic brokerages, which is connected with US brokers. Once accounts are set up, funds can be transferred to the overseas demat account similar to a regular demat account, facilitating investment in the US stock market. The domestic brokerages invest through the NSE IFSC (International Financial Service Centre), a subsidiary of the National Stock Exchange (NSE), that operates as an international stock exchange in GIFT City.
Indian citizens annually invest up to USD 250,000 in foreign countries, inclusive of all other investments beyond US stocks. Brokerage Charges according to many brokerages are flat Rs 50 for US stocks. According to Indian Express, Grow and Upstox offer the most number of US stocks followed by ICICI Direct. Aditya Birla Capital, Kotak Securities, and IIFL Securities follow on the list.
Mutual Funds
Indian mutual fund houses also offer mutual funds tailored that invest in the US. Multiple funds offer exposure to Apple, Facebook, Amazon and Google. They invest in the US or other global markets directly through the FoF method or through feeder funds that invest in these parent FOFs. Examples include the Franklin U.S. Opportunities Fund or the feeder fund Franklin India Feeder Franklin US Opportunities Fund that invests in this parent fund. Bandhan US Equity Fund and its Fund of Fund, ICIC Prudential US Blue Chip Equity Fund, and Edelweiss US Technology Equity Fund are some other examples.
Note that FOFs typically have higher expense ratios than domestic mutual funds due to more management formalities or administrative costs.
Investing via ETFs
Exchange Traded Funds (ETFs) are also another simpler investment route. There are many Indian ETFs that track US stock market indices. Notable, the Securities and Exchange Board of India (SEBI) has asked the Association of Mutual Funds of India (AMFI) to suspend inflows into funds investing in overseas ETFs from April 1, 2024. However, this restriction can be lifted shortly and investors may start investments. Examples include Mirae Asset NYSE FANG+ ETF an ETF tracking NYSE FANG+ Total Return Index, Motilal Oswal NASDAQ 100 ETF another ETF tracking Nasdaq 100 Total Return Index, or Motilal Oswal Nasdaq Q50 ETF that tracks NASDAQ Q-50 Total Return Index.
