How To Invest In NASDAQ From India?
August 18 2022 - Team Stockal
When you hear the word “NASDAQ,” most people immediately picture the largest market in the world for buying and selling tech stocks. We can picture thousands of traders talking on the phone and getting customers to invest. While the perception is normally that only US citizens can invest in that market, things have changed. It’s now possible to invest in India right from your home. Wouldn’t you like to know how to invest in NASDAQ from India? Read on.
How To Invest In NASDAQ From India?
Nasdaq became well-known because it was the first stock exchange to use computers. It has only ever deployed heaps of processors that spin silently, unlike its competitors, whose trading floors were filled with boisterous groups of traders shouting orders and flashing hand signals in a crude system.
NASDAQ has a tendency to attract techpreneurs from all over the world due to the understanding of the tech market amongst the investors and the ease with which the funds can be raised for tech ventures. That ease is not available in the other local markets.
The Nasdaq, which is the second largest exchange worldwide, had a far greater number of listed domestic and foreign firms—3,790—as of June 2022, compared to the NYSE, which had a combined total of 2,584 listed domestic and foreign companies, despite the NYSE having a higher market capitalization. The six most valuable businesses in the world—Apple, Microsoft, Amazon, Google parent Alphabet, Tesla, and Facebook—have their shares listed on Nasdaq.
You may now be enticed to understand further how to buy NASDAQ shares from India; however, before we get to that question, it is important to know about NASDAQ a little more.
What is the NASDAQ 100 and NASDAQ composite?
Two notable stock indices, the Nasdaq Composite and the Nasdaq 100 are based on the companies that trade on Nasdaq, the second-largest stock exchange in the world. The Nasdaq Composite index measures the performance of over 3,000 Nasdaq-listed equities, whereas the Nasdaq 100 index analyses the performance of the exchange’s top non-financial corporations.
- NASDAQ Composite:
Nearly all of the businesses listed on the Nasdaq stock market are followed using the Nasdaq Composite. The index excludes preferred equities and exchange-traded funds (ETFs). For a stock to be a part of the index, the following is applicable:
- The Nasdaq market is the sole place where stock must be listed.
- Stock must be common stock of a single company; exchange-traded funds (ETFs), preferred stock, and other securities are not eligible.
- Limited partnership shares, real estate investment trusts (REITs), and American depositary receipts (ADRs) may also be used.
The index comprises consumer services, which make up 20% of the index, technology companies which make up 50% of the index, and healthcare, 10% of the index. The remaining companies operate in publicly traded sectors, including the oil industry, utilities, and telecommunications.
The Nasdaq Composite Index, which contains every Nasdaq-listed common stock, provides investors with exposure to today’s tech titans such as Apple, Microsoft, and Amazon and some exposure to tomorrow’s tech heavyweights.
- NASDAQ 100:
The Nasdaq 100 has a significantly smaller scope than the Nasdaq Composite since it only follows the top 100 Nasdaq-listed companies, excluding those in the banking sector. The Nasdaq 100 is identified by the symbol NDX.
The Nasdaq 100 does not include all common stocks traded on the Nasdaq exchange; instead, it only comprises 101 equity securities offered by 100 of the biggest non-financial corporations listed on the NASDAQ. The 100 companies that make up the Nasdaq 100 account for more than 90% of the weight of the Nasdaq Composite Index.
Like its sister index, the Nasdaq 100 is heavily weighted toward companies in the technology industry, which account for more than 50% of the index’s weighting. However, the Nasdaq Composite gives a more complete view of the stock market as a whole and delivers a more accurate depiction of all the stocks listed on the Nasdaq exchange.
How to trade on NASDAQ from India?
You’ve come to the correct place if you’ve been wondering how to invest in NASDAQ stocks from India. Below mentioned are four ways in which you may do the same:
- Direct Investment:
You may invest in NASDAQ from India by creating a brokerage account in the US or by using online platforms that provide this option, like Stockal. Stockal makes investing in NASDAQ shares simple for you. You may buy shares of companies that trade on NASDAQ, such as Apple, Tesla and even Google (Alphabet) on Stockal. Stockal aims to make NASDAQ trading from India – quick, easy and accessible from any location.
- Curated stacks:
With a single click, you may invest in pre-configured sets of equities and exchange-traded funds (ETFs) known as stacks. Stacks on Stockal help you accumulate wealth since their baskets are the end product of extensive labour and study. They concentrate on the company’s fundamentals as well as its growth prospects, among other things, to create a single basket of stocks and ETFs.
The Obvious Portfolio is a group of the most influential media, technology, and internet firms, as the name suggests. These businesses include Facebook, Amazon, Apple, Netflix, Google, and Microsoft.
An ETF is another option to invest in NASDAQ from India. ETFs are collections of several stocks or bonds that trade as a single fund. ETF units may only be bought or sold on a stock exchange during trading hours. With the help of ETFs, you may make a single investment in a variety of stocks that are part of the same index.
While investing in ETFs, there are again two methods to invest in NASDAQ from India:
- US ETFs in India:
On Stockal, you may invest in ETFs that are in the US which tracks the NASDAQ. Additionally, you may also invest in NASDAQ ETFs to spread your risk and benefit from US stock market gains.
100 NASDAQ-listed equities comprise a modified market capitalization-weighted index that QQQ monitors.
A modified market-cap-weighted, narrow index comprising 100 non-financial stocks that are the next-eligible firms to be included in the NASDAQ-100 Index is tracked by QQQJ.
- Indian ETFs that track NASDAQ:
You may invest in the NASDAQ from India by buying the ETFs provided there. The Motilal Oswal NASDAQ 100 ETF index fund is one such example of such ETFs.
- Mutual Funds:
Another alternative is mutual funds that invest in US companies that have exposure to NASDAQ shares. Direct stock investments display the investor’s ability to take risks, and as a result, they can potentially offer higher gains. Market volatility-related risks are reduced by mutual funds. The returns offered are more stable but cannot match those offered by directly investing in the stock market.
What is the minimum amount to trade NASDAQ?
Further to knowing how to invest in NASDAQ from India, you should also be aware of certain trading nuances. Nasdaq won’t allow any company to trade on its exchange. To get listed, each firm must adhere to the SEC rules for Nasdaq listing accounting for corporate governance rules 4350, 4351 and 4360.
A company must have at least 12,50,000 traded shares outstanding, and the bid price must be a minimum of $4. Depending on the type of security listed, a fee of $5000 – $25,000 is charged. Fees pertaining to the quantity of shares will also need to be paid, which range from $100,000 to $150,000.
Other fees are also levied depending on the type of company as well. If the company does not meet the requirements like operating income, it can make up in other areas, like revenue, to improve the quality of the listing. Failure to meet any of these results in delisting.
Think about some of the most well-known firms in the world; chances are they are all listed on NASDAQ. Examples include Facebook, Apple, Google, and many more. Owning stock in these corporations was difficult for Indian investors up until recently. However, investing in NASDAQ from India is now quite simple.
If, as an investor, you are willing to take risks, then you may invest directly in NASDAQ stocks using Stockal. However, it is important to comprehend that risks and returns are often directly correlated, which means that higher risks may lead to higher returns and vice-versa.
ETFs and Stockal stacks are the simplest methods to invest in the Nasdaq if you don’t have the time to study and choose equities, where Stockal pools together stocks based on theme, idea or sector related to stocks listed on NASDAQ. It is important to remember investments are subject to both risks and costs. As an investor, it is important to gauge your risk appetite before investing.