Suryaa Business Desk: Indian retail investors are turning their eyes to overseas markets as domestic stock markets fail to deliver expected returns.... Indian retail investors are turning their gaze towards overseas markets as domestic stock markets failed to generate expected returns. In the recent past, the slowdown in the performance of domestic equities and better growth in international markets has brought about a significant change in the mindset of small investors. The trend of overseas investing in the country has reached new heights as investors are keen to invest directly in America and other global markets in particular. Digital platforms made available by modern discount broking firms in India have made it easier to invest in foreign stocks.
Fractional share investing methods provide an opportunity to buy shares of foreign technology giants and international companies with small amounts. At the same time due to some regulatory restrictions on investments in foreign assets by domestic mutual funds and exchange traded funds, there has been a huge demand for some of the overseas ETFs available in the market. This unexpected demand has caused the trading prices of foreign ETFs to trade at a significant premium to their actual net asset value, market experts say. Investors are diversifying their portfolio internationally to protect their investments from volatility and fluctuations in domestic markets. Although the financial regulatory bodies are closely monitoring the flow of domestic investors' funds to foreign markets at this level, it is noteworthy that no strict restrictions have been implemented at present.
But financial experts suggest that currency exchange costs, global tensions, inflation and international macroeconomic challenges must be taken into account while investing in foreign markets. Although foreign stocks are likely to give fast returns, it is analyzed that one should understand the risk of loss due to market fluctuations and invest only. This interest shown by Indian retail investors in global equities is likely to further influence domestic investment trends in the coming days.