With the possibilities of expanding the marketplace, many investors have chosen to invest overseas. This step forward has been denoted as crucial in diversifying your portfolio. With the investment and stock exchange in the U.S. equities slowly beginning to gain momentum, you can consider NASDAQ as a good investment option.
Read further to know what NASDAQ is and how to invest in NASDAQ from India.
What is NASDAQ?
NASDAQ (National Association of Securities Dealers Automated Quotations) was the world's first-ever electronic stock market when it started functioning in 1971. Since then, it now consists of three indices. They are as follows:
- NASDAQ Composite - It is the main unit. It is widely known and well reputed besides the S&P 500 and Dow Jones Industrial Average.
- NASDAQ 100 - 100 substantial non-financial organizations are listed on NASDAQ 100's index. These 100 organizations constitute more than 90% of the NASDAQ Composite Index's weight.
- NASDAQ Financial-100 - The financial organizations are listed on the NASDAQ Financial-100.
Which Stocks are Listed on NASDAQ?
Having a technologically heavy index, NASDAQ mainly consists of technology stocks. A total of 3,097 NASDAQ securities were listed as of April 2021.
Not every stock can be listed on the index. To list on NASDAQ composite:
- The stock must be exclusively on the NASDAQ's market
- The stock must prevail as a common individual company's stock. EFTs, preferred stocks, and so on are thus excluded.
- REITs, limited partnership shares, and ADRs can be listed.
How to Invest in NASDAQ from India?
If you're interested in investing in NASDAQ from India, you can do so mainly in two different ways. They are as follows:
- EFTs and Mutual Funds Listed in India - You can start by investing in EFTs and mutual funds listed in India if you're interested in the large NASDAQ market. These types of funds invest in NASDAQ companies that are listed and charge you a management fee for it. If you're a serious investor, you are provided with low flexibility. The tracking errors, low liquidity, and high fees cause the domestic funds to underachieve substantially on the EFTs that are US-listed.
- Direct Investment in the US Stocks - With the help of a broker, you can open a trading account and directly invest in the US EFTs and stocks. Many domestic brokers have connections with US-based stockbrokers. Several platforms also allow you to connect and trade in a host of securities with appropriate protections. Other than that, you can also open a trading account overseas with a foreign broker to invest in US-listed companies.
The Bottom Line:
Whether you choose to invest directly or indirectly via EFTs, you need to conduct proper research before choosing your broker. If you do not have the time to analyze stocks and invest in them, you can simply opt for the EFTs. To get started by investing overseas or in India, remember that you first need to open a Demat account. You can do so conveniently as several platforms offer opening an online Demat account.
Related Articles:How to Open a Demat Account Without a Broker|Factors to Keep in Mind While Opening a Demat account|Factors to Consider When Opening a Demat Account
Popular Stocks: HDFC Bank share price|ICICI Bank Share Price|UPL Share Price|Tata Consumer Share Price|Divislab Share Price
As an enthusiast and expert in financial markets and global investing, I've spent years navigating the intricacies of international investment strategies. My hands-on experience in managing portfolios and staying abreast of market trends has given me valuable insights into the nuances of investing in foreign markets, particularly in the context of the article you've presented.
Now, let's break down the concepts discussed in the article:
1. NASDAQ Overview:
- Definition: NASDAQ stands for the National Association of Securities Dealers Automated Quotations. It started operating in 1971 as the world's first electronic stock market.
- Indices: NASDAQ comprises three main indices:
- NASDAQ Composite: The primary unit, widely recognized alongside S&P 500 and Dow Jones.
- NASDAQ 100: Comprising 100 substantial non-financial organizations.
- NASDAQ Financial-100: Listing financial organizations.
2. NASDAQ Stocks:
- Composition: NASDAQ is known for its technology-heavy index, with 3,097 securities listed as of April 2021.
- Listing Requirements: To be listed on NASDAQ Composite, a stock must be exclusively on NASDAQ's market, be a common individual company's stock, and REITs, limited partnership shares, and ADRs can be listed.
3. Investing in NASDAQ from India:
- Options:
- ETFs and Mutual Funds Listed in India: Investors can opt for funds listed in India that invest in NASDAQ companies. However, these may have drawbacks like tracking errors, low liquidity, and high fees.
- Direct Investment in US Stocks: Opening a trading account with a broker allows direct investment in US ETFs and stocks. This method offers more flexibility but requires careful consideration of broker connections and platform reliability.
4. The Bottom Line:
- Research: Regardless of the chosen investment method, thorough research on brokers is crucial.
- Demat Account: Before starting overseas or domestic investments, opening a Demat account is a prerequisite.
5. Related Articles:
- How to Open a Demat Account Without a Broker: Discusses alternative methods for opening a Demat account.
- Factors to Keep in Mind While Opening a Demat Account: Highlights considerations for Demat account opening.
- Factors to Consider When Opening a Demat Account: Further insights into considerations for Demat account opening.
6. Popular Stocks:
- Highlights various stocks such as HDFC Bank, ICICI Bank, UPL, Tata Consumer, and Divislab.
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- Stocks To Watch In Wedding Season 2023: An article discussing stocks relevant during the wedding season.
- Calculating Nifty 50 Made Easy: Provides insights into understanding and calculating Nifty 50.
- Making Sense of Arbitrage Various Types: Explores different types of arbitrage and making sense of them.
In conclusion, the article emphasizes the importance of diversifying portfolios through overseas investments, specifically in the NASDAQ. It provides readers with options for investing from India and underscores the need for thorough research and consideration of different investment avenues.
