Planning to diversify your investment portfolio with US stocks? For Indian investors, the US market offers unique opportunities to invest in some of the world’s most influential companies across sectors like technology, consumer goods, healthcare, and finance. Moreover, investing in US stocks can improve portfolio diversification, offer protection against currency fluctuations, and serve as a hedge against domestic market volatility.
Ready to explore global opportunities and expand your investment reach? Here’s a step-by-step guide to get started with US stock trading from India.
How to invest in US stocks from India
There are two easy ways to invest in US stocks from India:
1. Direct investment in US stocks
Via a domestic broker: Many Indian brokers have partnerships with US brokers that allow you to access US stocks. All you have to do is choose a domestic broker that offers international trading facilities.
Via a foreign broker: You can directly invest in US stocks by opening an account with a US-based brokerage that operates in India. This method gives you complete control over your portfolio and allows you to select individual stocks based on your research.
Once you have selected a broker, you may need to complete the Know Your Customer (KYC) process. Common documentation includes:
- Proof of identity (Aadhaar card, PAN card, etc.)
- Proof of address (Utility bills, bank statements, etc.)
- Proof of income or assets may be requested in some cases
For Indian brokers, the process could be faster and digital, while global brokers may require complex documents or additional verifications. Once you have opened an account, simply add funds and start trading.
2. Indirect investment via mutual funds or ETFs
If direct investment seems too complex or time-consuming, you can opt for an indirect route through mutual funds or Exchange-Traded Funds (ETFs) that focus on US stocks. Here are the options in detail:
ETFs
ETFs are funds that trade on stock exchanges just like regular stocks. An ETF holds a collection of securities (e.g., stocks) that typically replicate the performance of a market index they track. This means when you invest in an ETF, you are investing in all the companies that make up the index and receive instant diversification.
Since ETFs are traded like stocks, they offer liquidity, and you can buy and sell them during market hours.
Mutual funds
Mutual funds are investment vehicles that collect money from several investors to invest in a variety of assets, including US stocks. These funds are managed by experts who select and maintain a diversified portfolio of securities on behalf of the investors. By investing in a mutual fund that focuses on US stocks, you get exposure to several companies without having to select individual stocks yourself.
Mutual funds offer two main ways to invest in US stocks:
- Systematic Investment Plan (SIP): With an SIP, you can invest small, fixed amounts regularly (monthly or quarterly) and build your US stock portfolio over time while benefiting from cost averaging. It’s an ideal approach for those who prefer disciplined and gradual investing.
- Lump sum investments: A lump sum investment lets you invest a large amount in one go. This approach allows for immediate exposure to market opportunities and can potentially generate higher returns if timed well.
Key takeaways
Investing in US stocks from India offers an opportunity to diversify your portfolio and get exposure to global markets. Whether you choose direct investment through a brokerage firm or opt for the convenience of mutual funds and ETFs, both approaches provide access to some of the world’s leading companies and sectors.
Mobile apps and online platforms allow you to invest in US stocks and complete transactions within a few clicks. However, it’s equally important to consider factors like brokerage fees, currency conversion, market risks, and tax implications before making a decision. With thorough research and a well-thought-out strategy, you can leverage the long-term growth potential that US stocks offer.
