How easy is it to start investing in foreign stocks sitting in India?
An investor must first register with a brokerage house and get his KYC done. The process is entirely online and requires only your PAN and Aadhaar cards. After the details are verified, the customer can transfer money from his bank account to his brokerage account and start trading. Under the Liberalised Remittance Scheme, there is a cap of $2.5 lakh (roughly Rs 1.85 crore) per individual in a financial year.
How does Globalise help one invest?
Globalise is a platform that provides Indian investors access to the US markets. We have tied up with a US-based brokerage account. When an investor opens an account with us, an underlying account is opened with the broker. When you transfer money for trading, the money goes directly into the brokerage account which you can then use for trading in stocks and funds.
Investing overseas is daunting. What is the protection for an investor?
In the US, if a customer invests in a listed company through an SEC-regulated brokerage account, he is protected up to $5,00,000 (roughly Rs 3.7 crore) against any wrongdoing by the brokerage house or account provider. This protection is not only for US residents but all investors.
The US market is massive. Won’t an investor will get lost and confused?
We have created baskets of stocks and funds to simplify the investors’ decision making. These curated baskets (called Globes) are built around specific goals and themes. We have portfolios built around biotechnology, future innovation and clean energy. These portfolios have been curated looking at the demand for high-growth companies involved in biotech research, clean energy and technological innovation.
Some curated portfolios
So, these portfolios are like funds?
These curated portfolios are built by our research team where investors can invest in a selected list of securities. The investor can view historical returns and select a portfolio that aligns with his investment objectives. Once an investor purchases the Globe, the stocks or ETFs in that Globe are transferred to his demat account. ETF-based portfolios may have 5-8 ETFs. Some stock-based portfolios will usually have 10-20 stocks, but some have about 50-70 stocks. It’s a discretionary portfolio where the investor can trade in the stocks as he likes.
Doesn’t a portfolio become too huge if there are 50-70 stocks in it?
The US stock market allows fractional ownership of stocks. So even if you have $5 (Rs 370), you can buy about 0.0015 share of Amazon which is trading at over $3,300 (Rs 2.44 lakh) per share. This fractional ownership allows us to build thematic portfolios with a larger number of securities without needing high minimum ticket sizes. The minimum ticket size for all portfolios on our platform is $100 (Rs 7,400).
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