Investing in the Nasdaq stock exchange from India has become increasingly accessible thanks to digital platforms and growing interest in international markets. The Nasdaq, home to leading technology and innovative companies like Apple, Google, and Tesla, has been one of the most sought-after exchanges for global investors. Indian investors, too, want to tap into this growth potential. In this guide, we’ll focus on how you can invest in Nasdaq from India using Zerodha, a popular Indian brokerage platform.
Understanding the Nasdaq and Its Appeal
The Nasdaq is a U.S.-based stock exchange known primarily for housing technology giants, but it also lists companies in other sectors such as healthcare, telecommunications, and finance. The exchange is divided into two major indices: the Nasdaq Composite and the Nasdaq 100. The Nasdaq 100, in particular, is one of the most closely watched indices in the world, comprising 100 of the largest and most actively traded non-financial companies listed on the Nasdaq.
Why Invest in the Nasdaq?
Investing in the Nasdaq offers exposure to some of the world’s most innovative and high-growth companies. Unlike traditional, diversified indices, Nasdaq leans heavily toward technology and innovation. Here are some benefits of investing in the Nasdaq:
- Access to high-growth tech and biotech companies
- Exposure to U.S. market trends and innovations
- Potential for portfolio diversification
- Increased long-term growth prospects
Nasdaq investments can add value to a diversified portfolio by bringing in high-growth potential, albeit with a degree of risk due to the volatility of the tech sector.
Can You Invest in the Nasdaq Directly via Zerodha?
As of now, Zerodha does not offer direct access to Nasdaq or any other U.S. stock exchange. Zerodha is primarily focused on Indian stocks, mutual funds, and exchange-traded funds (ETFs) on Indian exchanges like the NSE and BSE. However, there are indirect methods through which Zerodha can still help you get exposure to Nasdaq-listed companies.
Using Zerodha to Access Nasdaq Indirectly
Zerodha allows you to invest in certain mutual funds and ETFs listed on the Indian stock exchanges that track Nasdaq or U.S.-based indices. By investing in these funds, you can gain exposure to the Nasdaq without having to open an international brokerage account.
Step 1: Identify Nasdaq-Focused Mutual Funds and ETFs on Zerodha
Zerodha offers access to mutual funds and ETFs in India that invest in U.S. stocks, including those listed on the Nasdaq. These funds pool money from Indian investors and invest it in American markets, either directly or through a “feeder fund” structure.
Popular Mutual Funds Tracking Nasdaq
Motilal Oswal Nasdaq 100 ETF: This ETF directly mirrors the Nasdaq 100 Index, making it one of the closest options for Indian investors to gain exposure to Nasdaq’s top 100 companies. When you buy shares of this ETF, you’re effectively investing in the Nasdaq 100.
Edelweiss US Technology Equity Fund of Fund: This mutual fund focuses on U.S. technology stocks, many of which are listed on the Nasdaq. As a fund of fund (FoF), it invests in other U.S.-based funds that hold these stocks.
ICICI Prudential US Bluechip Equity Fund: Though not strictly limited to Nasdaq-listed companies, this fund focuses on large-cap U.S. stocks, providing exposure to companies like Apple, Amazon, and Microsoft, which are part of the Nasdaq 100.
How to Choose Between ETFs and Mutual Funds?
ETFs and mutual funds offer different benefits:
ETFs tend to have lower management fees and can be traded like stocks throughout the trading day. They are ideal for investors who want flexibility and are comfortable with market fluctuations.
Mutual funds offer a more managed approach but typically come with slightly higher fees. They’re suitable for those who prefer a hands-off approach.
When using Zerodha, you can find both these types of investment options. ETFs can be traded via Zerodha’s Kite platform, while mutual funds are available on Zerodha’s Coin platform.
Step 2: Open and Set Up Your Zerodha Account
Creating Your Zerodha Account
If you don’t already have a Zerodha account, you’ll need to open one. Here’s a quick guide to setting up your account:
Register on Zerodha’s website by providing your mobile number and email.
Complete the KYC process by submitting necessary documents, such as Aadhaar, PAN card, and bank details.
Set Up Trading and Demat Accounts: You’ll need both accounts to trade on the Kite platform.
Activate Coin for Mutual Funds: The Coin platform is Zerodha’s mutual fund distribution service, where you can invest in Nasdaq-focused mutual funds.
Once your account is verified and set up, you’ll have access to both the Kite and Coin platforms for trading.
Step 3: Use the Kite Platform to Invest in Nasdaq ETFs
The Kite platform is Zerodha’s main interface for stock and ETF trading. It allows you to search for Nasdaq-tracking ETFs and place buy orders.
How to Invest in Nasdaq 100 ETF on Zerodha’s Kite
Log in to Kite: Use your Zerodha credentials to log into Kite.
Search for Nasdaq 100 ETF: Type the name of the ETF, like “Motilal Oswal Nasdaq 100 ETF,” in the search bar.
Analyze the ETF’s Performance: Review the ETF’s recent performance, price chart, and other details.
Place a Buy Order: Once you’re ready, you can place a buy order, specifying the quantity and price at which you want to purchase.
The Nasdaq 100 ETF can be traded like any stock, meaning you can buy and sell it as you see fit. Additionally, it is available during Indian market hours, making it convenient to manage.
Step 4: Use the Coin Platform for Mutual Fund Investments
The Coin platform is dedicated to mutual fund investments. For Nasdaq-focused mutual funds, you’ll want to search for options like the Edelweiss US Technology Equity Fund of Fund.
How to Invest in a Nasdaq Mutual Fund on Coin
Log in to Coin: Using your Zerodha credentials, log into Coin.
Search for the Desired Mutual Fund: Look up funds by typing their name or using relevant keywords such as “US Equity” or “Nasdaq.”
Review Fund Details: Go over the fund’s investment strategy, past returns, and risk profile.
Set Up a SIP or Lump Sum Investment: You can invest either as a one-time lump sum or through a Systematic Investment Plan (SIP) for regular contributions.
Investing in Nasdaq-focused mutual funds through SIPs allows you to benefit from rupee-cost averaging, which helps smooth out volatility over time.
Step 5: Monitor and Manage Your Investments
Whether you choose an ETF or a mutual fund, it’s essential to monitor your investments regularly. You can track your holdings through Zerodha’s platform, evaluating performance and making adjustments as necessary.
When to Review Your Investment?
Regularly reviewing your portfolio, ideally every three to six months, can help ensure that your investments align with your financial goals. If you find that the Nasdaq-focused fund or ETF is underperforming, you may consider reallocating your funds.
Key Considerations When Investing in the Nasdaq from India
Currency Exchange Rate
One thing to keep in mind when investing in Nasdaq-focused assets is currency risk. Since Nasdaq stocks are denominated in USD, the performance of your investment in INR terms will be affected by the exchange rate between the INR and the USD.
Expense Ratios and Fees
Mutual funds and ETFs come with expense ratios, which cover the fund’s operating expenses. Zerodha charges no commission on mutual fund investments through Coin but does charge a nominal fee for ETF trading on Kite. Comparing expense ratios between funds can help you minimize costs.
Market Volatility and Sector Exposure
The Nasdaq is heavily tech-focused, making it more volatile than broader indices. This concentration in the tech sector can result in both significant gains and substantial losses, so consider your risk tolerance before investing.
Conclusion
Investing in Nasdaq from India is achievable through indirect methods, such as Nasdaq-focused ETFs and mutual funds, which are accessible on Zerodha’s Kite and Coin platforms. By carefully choosing the right investment vehicle and monitoring performance, Indian investors can gain exposure to the growth of U.S. technology giants and diversify their portfolios. While there are some risks to consider, such as currency fluctuations and sector volatility, a disciplined approach can make Nasdaq investments a valuable addition to your financial strategy.
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