India's foreign investments are growing exponentially in 2021; these 10 stocks are in focus

Prateek Jain, Co Founder and President, Winvesta, says the company has seen explosive growth in interest for overseas investment this year. In the first half of 2021 itself, they have added 3.5x the clients we onboarded in all of 2020. Before Winvesta, Prateek worked with Deutsche Bank for 11 years, across Singapore and New York. He ran a global energy trading book for Deutsche, building several new businesses and revenue streams. Here are the edited excerpts from his interview with Moneycontrol's Kshitij Anand. 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) NSE's move to offer US stocks to Indian residents adds further legitimacy and credibility to overseas investing. This helps create awareness in the investor community about the benefits of global diversification. We will need to see whether NSE includes a majority of US stocks or just the biggest names. Improvement in the USD conversion and remittance process would also be crucial to attract smaller account sizes. 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) We have seen explosive growth in interest for overseas investment this year. In the first half of 2021 itself, we have added 3.5x the clients we onboarded in all of 2020. 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) FAANG stocks make only about 17% of the total stock investments by AUM on Winvesta. The top 10 stocks so far in 2021, by transactions, are Tesla, Gamestop, Apple, Microsoft, Amazon, Nio, AMC, Palantir, FB, Netflix. In 2020, the most popular stocks were Tesla, Apple, Amazon, Microsoft, Nikola, Nio, Facebook, AMD, Netflix, and Berkshire Hathaway, in comparison. Q) Now with both BSE and NSE joining the party, will that impact your customers (loss of business)? What are the kind of offering you have planned or are offering currently that can be differentiator? A) BSE and NSE validation expands the market for global investing significantly in India. We see US stock investing become mainstream with this addition. Winvesta is the only platform that offers an international multi-currency account that enables investors to save, invest, and spend globally in 30+ currencies. When an investor wants to reallocate capital from US stocks to say fractional real-estate in the US, he can do so without bringing back the funds to India (and paying twice on FX). It really makes global investing truly global. With the increase in interest in US stocks, investors also need a lot of education and help to find the next opportunity. Winvesta has a full suite of investment tools, and a daily newsletter on US stocks to assist investors learn about global investing. 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) The most popular ETF on Winvesta by AUM is TQQQ (ProShares UltraPro QQQ) ETF, followed by ARKK (ARK Innovation), ARKG (ARK Genomic Revolution), FNGU (Bank of Montreal MicroSectors FANG Index 3X Leveraged), and VTI (Vanguard Total Stock Market Index). ETFs hold about 13% AUM on the platform as of June 2021. Q) Between stocks and ETFs which one is a more popular category? A) Stocks are more popular, both by the number of transactions, and AUM. Most global investors are looking for exposure to particular stocks or themes, and prefer to pick their own stocks Q) What is the ideal portfolio allocation limit one should keep when diversifying overseas? A) Experts recommend starting with 5-10% of your portfolio allocated to overseas investments, and gradually increasing it to 20-25%. We have seen many investors with over 50% allocation to US stocks. There is no ideal allocation that suits everyone, as it depends on the investment goals of the investor. 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.