Global Investing Platform Stockal has grown from serving 10,000 users, before the pandemic, to 100,000 now, clocking in $ 500 million worth of transactions during the worldwide health crisis.
In an interview with Moneycontrol’s Kshitij Anand, Vinay Bharathwaj, co-founder and co-CEO of Stockal, talks about the rising interest in global equities, popular stocks among Indian investors, how much of your portfolio should you allocate to overseas equity and much more.
Edited excerpts:
Q) Both BSE and NSE are facilitating transacting in US stocks as well as other countries that suggest that exchanges are willing to tap on investors who want to diversify portfolios globally. What are your views?
A) It is a pretty good stride, if two large Indian exchanges are planning to open up avenues of investing in the US markets, this clearly shows that there is an inherent market demand which justifies our thesis that Indian investors are actively looking to invest in US equities.
With more people coming in, the market demand will expand and enable investors to find more product offerings to invest in.
Q) What is kind of additions (in terms of investors looking to invest overseas) you have seen so far in 2021 or the first half of 2021 compared to last year?
A) More than $ 500 million worth of transactions have been completed on the Stockal platform. We grew from under 10,000 users to over 100,000 users during the pandemic as on March 2021 (About10x from Pre- COVID levels).
Q) Are Indian investors glued to FAANG or the list has widened? Which are the top 10 stocks in terms of ownership you have seen Indian investors betting so far in 2021 vs what you have seen in 2020?
A) Most of the trading interest can be attributed to the top sector like Consumer, Technology, Healthcare and Communication Service with the top stocks being Tesla, Microsoft, Apple, Amazon, Nio, Nvidia, AMC, Netflix, Google, and Facebook.
In the past 15 months during the COVID-19 pandemic, assets invested by Indians grew from $ 8million to $ 110million with transactions worth USD 500 million being processed on Stockal’s platform.
We have seen customers maintain a good balance between both FAANG and other high-growth stocks in their portfolios. Moreover, many IPOs, Gaming Stocks, and ESG stocks have also gained momentum in the past few months.
Q) Now with both BSE and NSE joining the party, will that impact your customers? What are the kind of offering you have planned or are offering currently that can be differentiators?
A) What the exchanges are offering will help more Indians to invest but the scope will be limited. NSE is offering unsecured depository receipts which enable investors to invest in about 50 US Stocks in the GIFT city – which means Forex and LRS will come into the picture which might not make processes easier for the investors.
It will provide existing domestic users with an option to invest in some US stocks. At Stockal, we have about 5500+ Stocks and ETFs to offers our customer base.
Moreover, the Gujarat GIFT city will be considered as a foreign jurisdiction by the Indian government which means most of the issues arising in processes like remitting money and getting dividend remains the same as the transactions with be made in US Dollars only.
BSE has entered into a referral partnership with interactive brokers to offer US stocks. Similar to the offerings by NSE, users at BSE will have to go through processes like LRS and Forex.
Q) Apart from stocks which are the ETFs that are popular among Indian investors? Please name a few of them and the kind of money riding on this category?
A) There are several ETFs that have been popular amongst investors recently like Vanguard Financials (VFH) followed by Invesco QQQ ETF and SPDR S&P 500 ETF.
Q) Between stocks and ETFs which one is a more popular category?
A) Based on our previous experience, ETFs attract 20% of all investments on Stockal, 10% is just in cash balances, and 70% in the direct stocks. Overall equity exposure of investors on Stockal (including equity ETFs) is about 85%.
Q) What is the ideal portfolio allocation limit one should keep when diversifying overseas?
A) Depending on how the portfolio has been created, we can have a 10-15% allocation towards overall global investment. This percentage can be a mix of both ETFs, direct stocks, and other instruments.
Investors must definitely research well before to they chose an ideal mix of ETFs, Direct stocks and add a bunch of high-performing blue-chip companies in their portfolio.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
