MUMBAI: Technology remains the top bet for global investing by Indians, while investors have also been focusing on recently listed Coinbase in the US. On global investment platform, Vested Finance, more than $600,000 has been invested in the crypto exchange at an average trade size of about $500 in the stock since the listing in April. Viram Shah, co-founder and CEO, Vested, spoke to Mint on custom portfolio services and the outlook for the US market.
Any changes in global investing style post covid?
Investors have become much more active post covid. It is because of the education in terms of why they should be investing globally and how they can go about it, as well as multiple players adopting global investing.
What we have seen on our platform is that beyond FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks, technology does continue to be a popular sector for Indians. Around 80-85% of our portfolio is in individual stocks and 15-20% is in exchange traded funds (ETFs). That continues to be the trend. In terms of companies, apart from FAANG, Tesla is the most popular stock, and we also see a lot of interest in software-related companies. Moreover, through the pandemic, Netflix has been very popular. In terms of new listings, crypto exchange, Coinbase was well received.
Did you witness any dip in trading due to second wave?
Overall, in terms of new deposits, the trend has remained positive in May. However, what we did see was trading volumes and frequency dropped, q phenomenon witnessed across across the world. Compared to last year, this time even when people continued to work, covid impacted a lot more people. The frequency with which the people might be trading on the platform dipped, but deposits remained strong.
What is your outlook for the US market?
Inflation is going to be the key factor, affecting markets over the next 12 months or so. Along with it, the US Federal Reserve’s policy response to inflation will have a big impact. Also, company earnings should expand as well, now that they are recovering from the pandemic. If we look at earnings over the last quarter, almost 97% of the S&P companies reported results which were 50% higher than expectations. As earnings progress, we believe stock markets have kind of good base to keep doing well.
What should be investing strategy for next 1-2 years?
Our user base is primarily entering the US markets for the first time. The strategy should be simple and from a long-term perspective, should focus on ETFs. Also, investors should not be distracted by short-term market volatility, which is bound to happen in times such as these.
How does your custom portfolio service work?
There are investors who pretty much knows what they want to buy, and they do their own research. Then there are those who want hand holding and advice. So there, ‘Vests’ come in between an ETF or a mutual fund and a stock. It is more thematic and concentrated in certain stocks or ETFs and give investors an opportunity of investing in certain themes or multi-asset portfolios. On the other hand, mutual fund is a much wider spectrum of investment.
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