How to Invest in a US ETF from India?

Indians have tried everything from producing assets to investing in fixed deposits, bond certificates, real estate, and commodities in order to build riches. Rather than just creating wealth, the emphasis is now on multiplying it. In other words, growing your money beyond tangible assets and geographical regions.

Regular investing allows you to profit from market volatility. When you invest a specific amount over time, you can build wealth that grows and can be used to fund physical assets, family goals, and milestone events such as children’s education in India or abroad. U.S. stocks are one of the younger asset types that are gaining appeal these days. Because foreign market investment is still relatively new, here is an aspect to think about as you begin your trip.

Here is a great way you can create wealth in the U.S. market:

ETFs (Exchange Traded Funds)

Directly investing in equities necessitates a certain level of knowledge, which could result in losses for investors. You can, however, invest in mutual funds and exchange-traded funds (ETFs), which offer you access to multiple U.S. companies at once. A US ETF will also allow you to gain exposure to specific industries, such as healthcare or energy, by purchasing an ETF that tracks these industries rather than buying individual companies.

Indians are increasingly interested in investing in theme-based ETFs, which, rather than focusing on specific sectors, focus on emerging themes such as energy, electric vehicles, cloud computing, mobility, or even global ETFs that provide broadly diversified exposure to U.S. and global – European, BRICs, and emerging and frontier equity markets. When it is compared to the actively managed mutual funds, ETFs have a lower expense ratio (the percentage of a fund’s assets spent for administrative and other operating expenditures).

Indians have become true global citizens. We travel internationally, buy international items, discuss global climate concerns, and win international test series! It means – you are all ready to get started with investing in a US ETF.

Would you like to know some of the most famous ETFs listed in the U.S. stock market right now? Here they are for you:

Some of the Most Popular ETFs Listed in US Stock Market

Here are five popular ETFs listed in the United States; they will give you the gist of the best performing ETFs in the United States and a better idea of where to get started:

1) SPY SPDR ETF

SPY is the most well-known and also the oldest Exchange Traded Fund, and it consistently ranks first in terms of AUM and trading volume. It follows the S&P 500 Index. Some of the biggest businesses in the Index are Microsoft, Apple, Amazon, JPMorgan, Facebook, and Alphabet (Google). The annual expense ratio is less than 1%. Vanguard’s VOO ETF, which tracks the S&P 500 index and has an annual expense ratio of 0.03%, is a good option for investors searching for a cheaper charge.

2) QQQ Powershares ETF

The NASDAQ 100 index is followed by QQQ, which includes some of the world’s most inventive firms, such as Microsoft, Google, Tesla, Starbucks, Netflix, eBay, and Intel. QQQ has outperformed SPY in 9 of the last ten years due to the large weight of tech stocks. QQQ has an annual expense ratio of 0.20%.

3) GLD SPDR ETF

GLD provides investors with a unique, cost-effective, and safe alternative to gain access to the gold market and diversify their portfolios. The largest physically-backed gold exchange-traded fund (ETF) in the world, SPDR Gold Shares, was first listed on the New York Stock Exchange in the year 2004 and has been traded on NYSE Arca since December 13, 2007. This is the most efficient way for Indian investors to invest in gold, with highly tight bids/offers and a low yearly fee ratio of 0.40%.

4) EWU iShares ETF

The MSCI United Kingdom Index, which gives access to large and mid-sized companies, is tracked by EWU. With Boris Johnson’s landslide victory in the general election (the largest majority for a single party since 1987) and a clear path to Brexit resolution, it could be the year’s contrarian bet. It also offers diversification away from technology and a 4.40% GBP dividend yield. The expense ratio is 0.47 % every year. If your family is considering studying abroad, this ETF should be included in your portfolio.

5) BND Vanguard ETF

BND provides broad exposure to investment-grade bonds in the United States. This ETF could be great for diversifying the risks of stocks in a portfolio while also providing a steady source of long-term USD income. The BND ETF can be used by investors who want to reduce risk by adding bonds to their portfolios. The expense ratio is only 0.035% per year.

What Led to Investing Around the World?

Companies now have the ability to invest in any economy thanks to globalization and the availability of cross-border investing. As an Indian investor, you may also invest in global equities and employ smart investing to diversify your portfolio and increase your returns from international markets. This has led to more investors diving into the U.S. stock market along with several other international markets.

How to Invest in U.S. ETFs?

The average ETF’s price changes during the day. Throughout the day, it is bought and sold. This is in contrast to mutual funds, which are typically traded or acquired once a day after the market closes. You can purchase exchange-traded funds based on foreign indices that provide the necessary exposure to a basket of international stocks. To gain access to these funds, you do not need to be familiar with overseas markets. Exchange-traded funds (ETFs) are also available directly from a local market through Indian brokers.

In order to invest in U.S. ETFs, you will have to create a brokerage account with an Indian company that gives you access to U.S. funds or an international broker. Once you have created your account – you can easily buy U.S. ETFs.

Conclusion

By investing in ETFs, you will be lowering your training risk because these funds largely imitate the movement of an index. Furthermore – the expense ratio of an ETF is far lower than that of a mutual fund. So – it is a great way of expanding your portfolio.