Expanding Your Investment Horizons: Global Opportunities For Indian Investors

India’s growing economy and thriving market offer plenty of investment opportunities, from stocks and mutual funds to commodities and fixed-income options. But sticking only to Indian markets can limit your portfolio’s growth and expose it to local risks. Diversifying globally can help balance your investments and boost returns.

One of the best places to invest beyond India is the United States, the world’s largest economy with some of the most dynamic financial markets. Investing in the US can open up exciting opportunities and strengthen your portfolio. Keep reading to find out why the US market is a smart choice and how you can start investing today!

Why expand your investment horizons to US markets? Top benefits

Many investors choose to invest in US stocks from India due to the following benefits: 

1. Diversify with global giants 

The US stock market is home to some of the world's most innovative and high-growth companies across sectors like technology, healthcare, and renewable energy. For example:

• Apple: A global leader in consumer electronics and software.
• Tesla: Revolutionises electric vehicles, robotics and sustainable energy solutions.
• Microsoft: Dominates cloud computing and enterprise software.
• Amazon: Pioneers in e-commerce, OTT and cloud services.
• NVIDIA: Leads in Artificial Intelliegnce (AI) powered graphics and computing technology.
• Pfizer: Innovates in pharmaceuticals and healthcare solutions.

Many companies listed on the US stock exchanges actively generate substantial revenue from various international markets. This global reach helps these companies reduce dependence on a single economy, manage regional economic slowdowns, and capitalise on growth opportunities across diverse markets. This means you benefit from more stable performance and consistent returns, even during US-specific downturns.

2. Earn higher returns

The US stock market has historically delivered strong returns over time, driven by its influential economy, innovation, and leadership in influential industries. For example, the S&P 500, a key index representing 500 of the largest US companies, has delivered average annual returns of over 10% from its inception in 1957 through 2024.

In fact, 2024 was an exceptional year for the US market. The S&P 500 recorded its second consecutive annual gain of over 20%, the tech-heavy Nasdaq surged by nearly 30%, and the Dow Jones Industrial Average climbed almost 13% for the year.

These figures highlight the benefits of investing in US stocks for the long term.

3. Capitalise on the US dollar's appreciation

The US Dollar (USD) has strengthened against many currencies, including the Indian Rupee (INR). For example, in 2015, the USD/INR exchange rate was about ₹66. As of January 14, 2025, it has risen to approximately ₹86.57. This reflects a depreciation of the rupee by over 31% against the dollar in just 10 years.

This trend means that even if your US investments grow modestly, the currency's appreciation can significantly boost your returns when converted back to rupees. For instance, if your investment grows by 10% in the US and the dollar appreciates by 4%, your effective return in INR could be 14%.

This currency hedge makes US investments highly attractive for investors who are looking for long-term wealth creation.

4. Buy fractional shares

The US market allows fractional investing. This means you can own a portion of high-priced stocks without needing to buy a full share. For example, if a US stock is priced at $900, but you only have $9 to invest, fractional investing allows you to own 1% of the stock. You receive dividends in proportion to the number of shares you own.

Another significant advantage of fractional investing is diversification. Instead of committing all your funds to a single stock, you can allocate small amounts across multiple companies. For example, with $50, you could buy fractional shares of Apple, Amazon, Tesla, and Microsoft, even if the Tesla share price is relatively high, and build a diversified portfolio.

How to invest in US stocks from India and diversify globally?

The US market offers both direct and indirect investment options:

Direct investments

This approach gives you complete flexibility in deciding which US stocks to invest in, how much capital to allocate, and when to exit your investments. Without an intermediary managing currency exposure or applying hedging, you fully benefit from the rupee's depreciation against the US dollar.

All you have to do is open a free US stocks account on a brokerage app and fund the account. Now, you can start investing in the global brands you prefer.

Exchange-Traded Funds (ETFs)

ETFs tracking indices like the S&P 500 or Nasdaq 100 offer exposure to a broad range of US companies with a single investment. Being passively managed, these options often come with lower expense ratios compared to actively managed funds.

Also, an ETF trades on the stock exchange, which means you can purchase it at real-time market prices during trading hours. This high liquidity enables you to instantly react to market trends, grab short-term opportunities, and adjust your portfolio as needed.

Note: It's necessary to open a demat account to buy ETFs.

Mutual funds

Several Indian mutual funds invest in US equities or international ETFs. These professionally managed funds allow you to benefit from the growth of global companies without directly investing in foreign markets.

A demat account is not mandatory to invest in mutual funds. You can simply visit the website or app offering international mutual funds and explore the available schemes.

Investments can be easily made through a Systematic Investment Plan (SIP) or a lumpsum. SIPs let you contribute a fixed amount regularly, average out market volatility, and build wealth over time. Lumpsum investments allow you to invest a large amount at once, which can be useful when markets are favourable.

Key takeaways

Expanding your investment horizons by exploring global opportunities, particularly in the US market, is a smart way to diversify your portfolio and achieve long-term growth. The benefits are numerous, such as access to cutting-edge industries, globally leading companies, the strength of the US dollar, and the potential for higher returns.

You can participate in the US market directly or indirectly via ETFs and mutual funds. Fractional investing has further removed barriers to the US market by enabling investments starting at $1. So, no matter your budget, you can easily add high-value US stocks to your portfolio and capitalise on the high growth potential this influential market offers.

Disclaimer: Equity investments are risky & subject to maket risks. 

 Moneycontrol Journalists are not involved in creation of this article.