Can I invest in international ETFs from India?
Indian investors have the option to invest in international ETFs either by directly using international brokerage platforms or indirectly through Indian mutual funds that provide exposure to global ETFs.
This allows them to diversify their portfolio across international markets while choosing an investment approach that aligns with their convenience and regulatory considerations.
Direct Investment Through International Brokers
1. Opening an International Brokerage Account:
Indian investors can gain direct access to global markets by opening a trading account with an international brokerage firm that accommodates clients from India.
2. Completing KYC and Funding the Account:
As part of the registration process, investors must fulfill the Know Your Customer (KYC) requirements mandated by the broker. Once the KYC verification is complete, funds can be transferred to the trading account to begin investing.
After successfully setting up the account and adding funds, investors can explore and trade a variety of international Exchange-Traded Funds (ETFs) available on the broker’s platform.
4. Examples of International Brokers:
Several well-known international brokers cater to Indian investors. Some of the prominent ones include Interactive Brokers, Charles Schwab International, and TD Ameritrade.
5. Utilizing the Liberalized Remittance Scheme (LRS):
Indian investors can also leverage the Liberalized Remittance Scheme (LRS), which allows individuals to legally remit money abroad for investment purposes. This approach may help avoid premium pricing often associated with international ETFs listed on Indian stock exchanges.
Indirect Investment Through Indian Mutual Funds
1. Investing in Indian Mutual Funds That Hold Global ETFs:
An alternative way to gain exposure to international markets is by investing in Indian mutual funds that allocate capital to global ETFs. These funds indirectly provide access to international equities while keeping the investment process straightforward.
2. Examples of Such Funds:
Some mutual funds in India specifically invest in international ETFs. For instance, the Motilal Oswal S&P 500 Index Fund and the Mirae Asset NYSE FANG+ ETF offer investors exposure to the U.S. stock market and leading global companies.
Indirect Investment Through Indian Mutual Funds
3. Advantages of This Approach:
Choosing this route enables investors to participate in the performance of international markets without the need to directly open and manage an overseas trading account. It simplifies the investment process while still allowing diversification.
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