Exposure to US Equity

in LeoFinance3 years ago

As an Indian, its very easy to invest in Indian Stock exchange either directly i.e. buying the stocks or indirectly i.e. investing in mutual funds. But we face a hurdle when it comes to buying international funds, especially US equity. Though since as a Crypto investor you don't usually face that hurdle because you have Tokenized Stocks in Bittrex.

image.png

But still, owning whole stocks and having a US equity portfolio is a dream for me at least.

So, I left with only one option i.e. having US equity in my mutual fund portfolio. In that I had two options, either go with Flexi Cap Fund or go with S&P 500 index fund. I narrowed down my search to two main mutual funds

  1. Parag Parikh Flexi Cap Fund
  2. Motilal Oswal S&P 500 Index Fund

Parag Parikh Flexi Cap Fund - In case of this Mutual Fund, it has holdings of both Indian Equity as well as US equity, and usually to diversify your portfolio people add flexible fund in their portfolio. Some of the top holdings of this mutual fund are:

image.png

Motilal Oswal S&P 500 Index Fund - In this case it invests totally on US equity and it invests in top 500 companies of US. Some of the top holdings of this mutual fund are:

image.png

As you can see using both the fund I get the exposure to US equity and thus which is what I wanted. But in my case since I invests in Indian equity directly i.e. buying shares and using mutual fund, I really did not wanted to have fix of Indian as well as US at this time. So I have chosen Motilal Oswal S&P 500 Index Fund to start the SIP.

Why I have started investing in international funds is for diversification, so in any day if Indian markets are going through a sharp correction, a portion of your money is insulated just like debt investments.

Do note that the taxes on international equity is bit different than the Indian equity, if the units are sold after 3 years from the date of investment the capital gains are taxed at 20% whereas if it is sold within 3 years from the date of investment, the gain is added to the income and they are taxed according to the applicable tax slab rate.

Posted Using LeoFinance Beta