Global Equity |Minance | India
The world economy is growing at a rapid pace over the past few decades. Markets have expanded, new companies have come up and investors have multiplied. Most of the investors still suffer from home country bias. Growing up in one country instills a sense of pride but also a sense of familiarity. Where we live defines us – from the food we eat, the sports teams we cheer for– to where we invest. It just feels more comfortable investing in something we know, something nearby us. What are the downsides of buying local? Choices are limited.
We know Reliance and the clout it holds within our borders. HDFC Bank has a strong very strong branch network. And Hindustan Unilever products have very good rural penetration. Each of these company’s stock has performed brilliantly.
We are ignorant and unaware of well-managed, ambitious companies across the world. Salesforce, the American CRM software giant tripled over the last five years; Dutch airplane manufacturer Airbus doubled and Chinese software giant Tencent returned 350% in the last half-decade.
That’s why we need to invest outside India. To capture opportunities that don’t exist in ours. India’s GDP is around three trillion dollars. The combined market capitalization of just three companies – Amazon, Apple, and Microsoft is larger than our GDP. Most of this growth has materialized in the last six or seven years. India’s domestic market does not have that bandwidth to absorb such mammoth growth. Hence we should invest globally.
Well these are some of the famous listed stocks of major countries and the best part is- sitting in India we can buy them from the comfort of our home.
Salesforce, Alphabet (Google), Microsoft, Illinois Tool Works, Ball Corp, Novartis, Coca Cola, Airbus, Diageo, Equity Residential, Goldman Sachs, Zoom Technologies, Tencent, Nestle, Qatar National Bank
Return on Global Equity
Developed markets: 157% in the last 5 years.
Emerging Markets: 164% in the last 5 years.
Most of us think that only HNIs are qualified to invest globally, that’s not true. Any Indian citizen can invest up to $250,000 annually. Minance makes this process very straightforward. We’ve partnered with Interactive Brokers (40-year-old Canadian investment firm specializing in global equity investments) for this. There’s hardly any paperwork and you can start investing with as less as $5,000.
Global investments do not come without downsides though. Investors face currency risk. For example, if you purchase a stock for $100 and the stock rises to $120 but if the dollar weakens by 15% against the rupee, your net gain is just 5%. On the flip side, if the dollar strengthens by 15%, your net returns increase to 35%. So, Time Entry into the investment is an important factor along with trends in the forex market. Here’s where Minance’s expertise comes in handy.
Minance will enable Indian investors to expand the horizon and think globally. The company has the processes in place for registration, investment & withdrawal of the fund. This article is the start of a series dedicated to investment into Global Equity. Keep looking for more posts on Minance and Global Equity in the near future.
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