Anupam Guha, Head, Private Wealth Management, ICICI Securities, says within 10 months of its launch, they received funds worth $ 20 million from customers to invest in the US market.
Guha has been with the ICICI Group for 20 years across retail, institutional and private banking businesses, both in India and overseas.
A subsidiary of ICICI Bank, ICICI Securities operates ICICI Direct, a virtual financial supermarket platform. ICICI Direct recently expanded its global investments facility to the United Kingdom, Japan, Hong Kong Germany and Singapore after making the US foray in August 2020.
In an interview to Moneycontrol’s Kshitij Anand, Guha says with the expansion to five new markets, their customers can now invest in all major developed countries of the world. Edited excerpts:
What is the response you are getting from your clients when it comes to investing abroad?
Within the first 10 months of launch, we have an AUM of $ ~20 million dollars. The number of customers using the account is steadily increasing. As awareness about this avenue increases, we could see a further bump up on this.
Customer interest in international/overseas investments is gaining traction slowly but surely. More customers are today open to investing abroad than say two years back.
This is as a result of increasing cognisance of diversifying beyond domestic markets and also easier access made possible by players like ICICI Direct.
The offering of five new markets—the United Kingdom, Japan, Hong Kong Germany and Singapore—in addition to the US makes you a leader. What is the kind of response you are expecting?
With the launch of these new markets, our customers today get access to all the major developed markets in the world. We believe this makes our offering more holistic and customers do not need to look beyond ICICI Direct to cater to their investment requirements.
We expect increased customer engagement with the launch of these additional markets. A lot of our existing customers enquired about the availability of other markets on the platform.
This was driven specifically by investors who work for these MNCs where the parent is listed in overseas markets so they want to participate in the growth of the company.
Is fractional investing available in all the new markets?
Currently, this feature is unique to only the US markets and we offer this on our platform.
Domestic investors can trade in stocks, exchange-traded funds, mutual funds (non-US), and fixed income products traded in those exchanges. Which are the things to consider while taking exposure in any of these products?
Customers looking to invest overseas should consider the limited availability under the Liberalised Remittance Scheme (LRS) of the Reserve Bank of India.
The $ 250,000-PA limit, for residents Indians today, is an aggregate limit for all forex requirements like travel, medical, maintenance money for children, property, etc. ICICI Direct has made available the additional markets at no extra subscription cost to the customer with no account opening charges.
As investors, we generally only think of diversification among the asset classes available domestically. Global investment adds a completely new element to diversification.
However, investors should also keep in mind the tax implications. For instance, in the case of shares of foreign companies, the holding period should be two years for gains to be qualified as long-term capital gains (LTCG), which is taxed at 20 percent with indexation.
In comparison, for LTCG in India, the tax rate is 10 percent. To understand the details of the tax implications on international investments, investors should consult an expert.
What is the kind of taxation aspect which investors should keep in mind while investing globally?
Income earned from foreign investments is taxable in the hands of the individual, if taxes are paid in the country of origin, the investor may claim relief under the Double Taxation Avoidance Agreement, if any.
To understand the details of the tax implications on international investments, investors should consult an expert.
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