How Indian investor's appetite for US stocks soared in 2021

2021 could well be the year when Indian retail investors truly came of age. Besides getting active on Dalal Street, Indians ventured in record numbers into Wall Street.The US markets saw one of their best years in 2021. S&P 500, a stock market index tracking the performance of 500 large companies listed on stock exchanges in the US, gained over 27% in the year. And as US markets moved upwards, investments by Indians in US stock markets more than doubled with Indians investing to the tune of $300-500 million across the top tech-powered wealth management platforms that TOI spoke to. From wishing to diversify geographically to hedging against a depreciating rupee and saving up for aspirations such as education abroad or travel, Indians put their money in several US stocks during the year – Tesla and the popular FAANG [Facebook, Amazon, Apple, Netflix, and Google] stocks being the favourites. medium nocaption89247114Going into 2022, brokers and analysts say investors are expected to focus on shares of larger and more established companies that are expected to withstand the impact of the monetary tightening in the US. The US Federal Reserve is expected to increase interest rates this March.Investing in US equities gives Indians the opportunity to diversify investments and gain from holding exposure to some of the largest companies in the world. And the ease of investing has helped. Investing in US stocks has soared thanks to the emergence of tech startups that simplify the logistics involved in global investing. These startups provide more information and research on global markets, facilitate quick account openings, and seamless and less expensive remittances thus encouraging Indians to explore international markets. medium nocaption89247541Untitled Carousel 85236602Data from global investing platform Stockal shows that Indian investment into the US grew more than 200% in 2021 over 2020. “While transacting investors grew more than almost 250%, volumes grew from $250 million in 2020 to close to $500 million in 2021 on Stockal among Indians,” Sitashwa Srivastava, co-founder, Stockal, saysThe majority of these investors show a great deal of maturity, he adds, citing that, on Stockal, about 70% of the users trade once or twice in six months, and park funds in curated portfolios managed by global asset managers. medium nocaption89247079Vested Finance, a Securities and Exchange Commission (SEC)-registered online investment platform, saw close to 800,000 new signups on its platform with investors placing more than 450,000 trades throughout the year with trading volumes crossing $250 million. “In 2021, Indians invested double of their 2020 investments [in US stocks],” Viram Shah, co-founder and CEO, Vested Finance, says. Shah adds that the users are typically investing for the long-term to build their wealth via global companies. !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r On Kristal.AI's digital-first private wealth platform, more than 1,600 new accounts were opened in 2021 – almost 10x of what they saw in 2020. Asheesh Chanda, co-founder and CEO, Kristal.AI, estimates that there has been over 50% growth in the industry [global investing] overall. "Among others, the key drivers include access to high alpha investment options like pre-IPOs and alternative funds," he says.And even as even as the American stock markets currently go through a deep correction phase, investments by Indians are expected to continue although volatility is expected. Stockal’s Srivastava says though some people are booking profits, many Indians are making fresh investments because stocks are cheaper and the US dollar has also weakened. But it is important not to get carried away. Just be patient and stick to your investment plan, experts advise.