Reasons To Invest In American Brands3 min readReading Time: 3 minutes
If you’ve ever wondered what it would feel like to own a part of your favourite global brands like Apple, Microsoft, Amazon, Google and many more, then this article is for you! By reading this article you will find out how to invest in American brands from India. But before telling you how, let’s first discuss the top reasons why people invest in American brands.
Reasons why people invest in American brands
1. Defend Against the Rising Dollar
One of the most basic reasons to invest in global brands especially from the US market is to mainly protect your wealth from deteriorating against the rising value of the US Dollar. You’ll know you have some wealth that’s growing every time the rupee falls against the dollar.
2. Opportunity to Invest in companies you love
Whether it’s Facebook, Tesla, PayPal or Adobe, you’ve loved these US Companies and have known about them for a long time. You use their products on a day-to-day basis and trust them.
3. Geographical Diversification
A diversified portfolio acts as a source of stability during market volatility. If your investments are across geographies, economic fluctuations in one country won’t affect your other investments as there is a lower correlation between domestic and foreign equities.
As the global economy is in its growth phase, it is one of the best times to diversify internationally. The United States is a mature market and is not as rapid as other economies. Growth is recurring, and investing internationally enables you to capture profits from shifting economic cycles.
India’s current GDP is approximately $3.05 trillion and USA’s GDP is approximately $24.003 trillion. USA’s GDP is about 8 times that of India which means that you are taking part in a much larger market with US-listed companies accounting for almost 40-60% of the world’s market capitalization.
4. Historical Performance
The Dow Jones Index and the NASDAQ have outperformed our humble NIFTY and SENSEX historically. So much that many times the US market rose when ours fell. If you don’t know much about NASDAQ it is a stock market index made up of 102 equity securities issued by 100 of the largest non-financial companies listed on the NASDAQ stock market.
What are the risks of investing in the US Stock Markets?
Without risk there is no investment and when it comes to investing, we want our money to grow with the highest rates of return, and the lowest risk possible. It’s not really easy to keep track of a foreign market and that’s something you may find difficult due to the time difference.
You will also need to consider the higher risk as your gains and losses will both be in dollars. Liquidity is also lesser than Indian investments. Keeping an eye on global factors and economic conditions that can affect the performance of US stocks is something that is of utmost importance.
How can you invest in the US Stock Market from India?
One of the easiest way to invest in the US Stock Market from India is by exploring the ICICI Prudential NASDAQ 100 Index Fund –NFO.
The ICICI Prudential NASDAQ 100 Index Fund is an open-ended index fund replicating the NASDAQ-100 INDEX. The scheme invests in NASDAQ-100 INDEX giving exposure to 100 largest globally leading non-financial companies.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Such representations are not indicative of future results. Paytm Money Ltd SEBI Reg No. INA100009859 Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi – 110019. The NFO offering is non Exchange traded products and Paytm Money Ltd (PML) is acting as an agent for distributing the same. Please note all disputes with respect to the distribution activity, would not have access to the Exchange investor redressal forum or Arbitration mechanism. The securities quoted are exemplary and are not recommendatory This information is purely based on publicly available data (Data source: https://www.icicipruamc.com/, Scheme Information Document, https://data.worldbank.org/ & http://mospi.nic.in/) and in no way to be considered as advice or recommendation.
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