NSE-IFSC, a unit of National Stock Exchange in Gujarat International Finance Tech City (GIFT) commenced trading of U.S. stocks on 3rd March, 2022. In its pilot programme, the international exchange is offering trading of NSE receipts of eight U.S. listed companies, namely, Apple, Amazon, Alphabet, Netflix, Meta Platform, Walmart, Tesla and Microsoft. Gradually, the exchange plans to offer receipts of 50 such U.S. companies.
But, global investing is not a new phenomenon in India as Stockal has been empowering you to invest globally since 2019.
Comparison of investing via Stockal vs NSE-IFSC
Note: Comparison based on information available on NSE-IFSC in the public domain. As of March 15, 2022, the NSE-IFSC route is still being tested under the pilot phase and is open to limited individuals for nine months. More details will be clear as the channel is made fully operational for wider public.
*DriveWealth LLC., a member of the Securities Investor Protection Corporation (SIPC), will serve as the custodian for your securities account. In the event that DriveWealth LLC., fails and is placed in liquidation under the Securities Investor Protection Act, securities in your brokerage account may be protected up to $500,000. For details, please see www.sipc.org.
Benefits of investing with Stockal over NSE-IFSC
Trade 5500+ stocks & ETFs on Stockal
Operational since 2019, Stockal has over 220,000 registered users actively trading in U.S. stock markets. Stockal offers trading of 5,500 plus stocks and ETFs, in comparison to 50 stocks as proposed by NSE IFSC. ETFs or Exchange Traded funds are a type of pooled investment security that typically track a sector, index or commodity, and are traded on an exchange like a regular stock.
Invest in Stacks via Stockal
Stacks are curated ready-made portfolios built by experienced global hedge fund and portfolio managers on specific themes. Stockal offers stacks on its platform through its partnerships with prominent players like Global X, Omniscience, AlphaNiti to name a few. One can also invest in the Disruptors Portfolio stack, on Stockal, that provides exposure to trending themes like cloud computing, E-commerce, cybersecurity and fintech to name a few. Stacks require a minimum investment of $1,000 and have consistently given good returns with a CAGR anywhere between 25-50%.
Hold Actual stocks on Stockal
When an investor buys shares via Stockal, they hold actual stocks of a company. Whereas through NSE-IFSC route, they will own Unsponsored Depositary Receipts (UDRs) of that stock that are not sponsored by the company. It is actually the NSE-IFSC’s partner bank in the United States that will hold the shares on behalf of Indian investors buying UDRs. Therefore, buying and owning actual stocks via Stockal will give the investors dividend and voting rights like an ordinary shareholder.
Buy Fractional Equities on Stockal
Stockal aims at democratising global investing by making the process as economical and simple as possible. If one finds a stock very expensive, then they can invest smaller amounts to buy a fractional share with no fixed ratio. With dollar-based investment, one need not bother about the number of shares to buy. Investors just decide the investment amount, and get shares worth the dollar amount invested. On Stockal, one can buy shares worth even $1 for a company that is trading at, let’s say, about $100 per share.
However, in case of NSE-IFSC, one share of a company is broken down into UDRs based on a ratio pre-determined by NSE and reviewed from time to time. For example, Amazon stock trading at $2,900 per share will be divided into 200 IFSC receipts worth about $15 each. But we are not sure how the decimal values will work in this case as any such minor change can deflect returns. In case of direct investing via Stockal, investors get their fractions till the eighth decimal values in quantity and till the second decimal values in price.
No need of Demat account for trading via Stockal
United States does not have a concept of demat account as investors are required to open a brokerage account only. With a Stockal trading account, one can trade directly via its U.S. broker partner, DriveWealth. Creating a Stockal account is completely free and takes barely 15 minutes.
Whereas, for trading via NSE-IFSC, investors need to open a separate demat account with any of the NSE-IFSC registered brokers. Investors can not use their existing demat account, used for Indian stock trading here. They are also required to complete their KYCs and US W-8BEN/ W-8BENE form with NSE IFSC to ensure that Indian investors are taxed only in India and not in the United States.
Pay less, trade more on Stockal
Trading via Stockal entails only brokerage charges and forex conversion charges. In addition to these, one needs to pay receipt issuance fee, demat account charges, custodian fee, etc. while trading through NSE-IFSC.
No 3-day settlement lag on Stockal
Stocks bought on Stockal will be credited to one’s account immediately, as against the 3-day settlement lag required by NSE-IFSC. Moreover, money raised from stocks sold via NSE-IFSC will also get credited after 3 days. This provides U.S. exchange-like liquidity and price discovery to investors on Stockal.
24-month holding period for long term capital gains on Stockal
For long term capital gains on transactions via Stockal, the minimum holding period is only 24 months as taxation is treated under foreign securities. However, on transactions via NSE-IFSC, the receipts must be held for 36 months to qualify for long term capital gains.
Stockal makes your global investing journey safe, simple, and secure. It ensures a seamless trading experience by providing you boundless choices, world-class research, efficient stock exchange-like price-discovery and liquidity, and frequent feature updates.