International investing [Resident Indian]

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Topic Author
CarpeDiem22
Posts: 215
Joined: Tue May 22, 2018 11:20 pm

International investing [Resident Indian]

Post by CarpeDiem22 » Tue Mar 05, 2019 1:03 am

Note: I am a resident Indian wanting to invest outside India.
Note 2: I am avoiding Interactive brokers and Feeder funds due to high cost for the amount I have for investing.

After about 2 years of buy-and-hold investing experience under my belt, I have decided to get some international exposure through locally-domiciled mutual funds. I have filtered down to below two options. Which one would you suggest to use?

1. Motilal Oswal NASDAQ 100 ETF:
https://www.valueresearchonline.com/fun ... code=12498

Type: Index ETF
Benchmark: Nasdaq 100
Launch Date: Mar 29, 2011
Expense Ratio: 0.50%
Turnover: 14%
Assets: $17 mn

2. ICICI Pru US Bluechip Equity Fund
https://www.valueresearchonline.com/fun ... code=17160

Type: Actively Managed Fund
Benchmark: S&P 500
Launch Date: Jul 06, 2012
Expense Ratio: 1.10%
Turnover: 74%
Assets: $35 mn

I can understand the upside of selecting fund 1 over fund 2 in terms of metrics I mentioned above, but I am not able to understand the downside (if any) of tracking Nasdaq 100 instead of S&P 500. Thanks.

mighty72
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Location: Somewhere in the West

Re: International investing [Resident Indian]

Post by mighty72 » Tue Mar 05, 2019 1:12 am

S&P500 is a broader representation of the US. stock market. NASDAQ will be more tech focused and not have any financial companies so excludes parts of the US economy.

Isn't there a passive S&P500 ETF?

AlohaJoe
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Location: Saigon, Vietnam

Re: International investing [Resident Indian]

Post by AlohaJoe » Tue Mar 05, 2019 1:15 am

CarpeDiem22 wrote:
Tue Mar 05, 2019 1:03 am
I am not able to understand the downside (if any) of tracking Nasdaq 100 instead of S&P 500. Thanks.
They track totally different sets of companies. In general the NASDAQ will have smaller but more tech-focused companies; it doesn't include any financial companies at all. The biggest names on the NASDAQ-100 will be very familiar -- Google, Amazon, Netflix -- so there is a fair amount of overlap, but NASDAQ-100 will include more companies you haven't heard of and won't include companies you have heard of. For instance, no car companies.

Image

Because of the tech-heavy focus of the NASDAQ-100 it has done very well in the past 10-15 years. But it also tends to crash harder -- look at how it got destroyed in 2000.

msk
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Re: International investing [Resident Indian]

Post by msk » Tue Mar 05, 2019 1:26 am

We all feel quite secure most of the time with our diversified ETFs. I used to own QQQ (=Nasdaq 100). Then came the dotcom fiasco. Lost 60% in a few days. Do not get too comfortable! Fiascos will ALWAYS happen. Luckily at that time I also owned SPY(=SP500) and Berkshire Hathaway. But then I also lost $100k in BRK in a few minutes during the Flash Crash. Stuff happens. For an Indian I would suggest that you look at VWRD (Vanguard World). I am invested via IB after much researching and using other brokers (Merrill Lynch, Datek, TDAmeritrade, etc.) and in VWRD (and accumulating equivalents at iShares/Black Rock). I am a nonUS taxpayer, non US citizen like you and have been investing in worldwide stocks for almost 4 decades. This is what I have gravitated to. IB and worldwide by market weight. You want to "play" the market? There will ALWAYS be something or sector that you are not invested in because you thought it was too expensive but it ends up doing much better than what you are invested in. Learn how to use options...

s8r
Posts: 118
Joined: Thu May 10, 2018 1:50 pm
Location: Northern Europe

Re: International investing [Resident Indian]

Post by s8r » Tue Mar 05, 2019 1:49 am

AlohaJoe wrote:
Tue Mar 05, 2019 1:15 am
The biggest names on the NASDAQ-100 will be very familiar -- Google, Amazon, Netflix -- so there is a fair amount of overlap, but NASDAQ-100 will include more companies you haven't heard of and won't include companies you have heard of. For instance, no car companies.
NASDAQ-100 does include Tesla, which makes cars.

Topic Author
CarpeDiem22
Posts: 215
Joined: Tue May 22, 2018 11:20 pm

Re: International investing [Resident Indian]

Post by CarpeDiem22 » Tue Mar 05, 2019 11:27 pm

mighty72 wrote:
Tue Mar 05, 2019 1:12 am
Isn't there a passive S&P500 ETF?
Sadly for me, no, not locally-domiciled.
msk wrote:
Tue Mar 05, 2019 1:26 am
We all feel quite secure most of the time with our diversified ETFs. I used to own QQQ (=Nasdaq 100). Then came the dotcom fiasco. Lost 60% in a few days. Do not get too comfortable! Fiascos will ALWAYS happen. Luckily at that time I also owned SPY(=SP500) and Berkshire Hathaway. But then I also lost $100k in BRK in a few minutes during the Flash Crash. Stuff happens. For an Indian I would suggest that you look at VWRD (Vanguard World). I am invested via IB after much researching and using other brokers (Merrill Lynch, Datek, TDAmeritrade, etc.) and in VWRD (and accumulating equivalents at iShares/Black Rock). I am a nonUS taxpayer, non US citizen like you and have been investing in worldwide stocks for almost 4 decades. This is what I have gravitated to. IB and worldwide by market weight. You want to "play" the market? There will ALWAYS be something or sector that you are not invested in because you thought it was too expensive but it ends up doing much better than what you are invested in. Learn how to use options...
I understand what you're saying, and I'm not trying to "play" the market, trust me. Given the limited choices I have, I am looking at US market because of its truly global companies. I understand IB and its benefits, but I don't have $100k to invest that will get me a account maintenance fee waiver. If I invest only $5K, yearly account maintenance fee is $120 for me, which is like 2.4% expense ratio. Like I said in my original post, IB is too expensive for me for the amounts that I have to invest. Here is the universe of international funds available to me if you can suggest a better choice. Thanks. https://www.valueresearchonline.com/fun ... eg%2Cclose
s8r wrote:
Tue Mar 05, 2019 1:49 am
AlohaJoe wrote:
Tue Mar 05, 2019 1:15 am
The biggest names on the NASDAQ-100 will be very familiar -- Google, Amazon, Netflix -- so there is a fair amount of overlap, but NASDAQ-100 will include more companies you haven't heard of and won't include companies you have heard of. For instance, no car companies.
NASDAQ-100 does include Tesla, which makes cars.
From what I read on Forbes, Tesla is a battery business, not a car business. It does make cars, though.

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unclescrooge
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Re: International investing [Resident Indian]

Post by unclescrooge » Tue Mar 05, 2019 11:33 pm

mighty72 wrote:
Tue Mar 05, 2019 1:12 am
S&P500 is a broader representation of the US. stock market. NASDAQ will be more tech focused and not have any financial companies so excludes parts of the US economy.

Isn't there a passive S&P500 ETF?
The sp500 is the benchmark, but the fund itself is actively managed for more than twice the fee.

I would split the difference and invest in both.

Topic Author
CarpeDiem22
Posts: 215
Joined: Tue May 22, 2018 11:20 pm

Re: International investing [Resident Indian]

Post by CarpeDiem22 » Wed Mar 06, 2019 12:03 am

unclescrooge wrote:
Tue Mar 05, 2019 11:33 pm
The sp500 is the benchmark, but the fund itself is actively managed for more than twice the fee.

I would split the difference and invest in both.
Thanks. I've been focusing on simplifying my portfolio and the thought of investing in both never crossed my mind. :D

1dangerousmind
Posts: 9
Joined: Sun Dec 01, 2019 7:37 pm

Re: International investing [Resident Indian]

Post by 1dangerousmind » Tue Dec 03, 2019 12:22 am

CarpeDiem22 wrote:
Tue Mar 05, 2019 11:27 pm
I understand what you're saying, and I'm not trying to "play" the market, trust me. Given the limited choices I have, I am looking at US market because of its truly global companies. I understand IB and its benefits, but I don't have $100k to invest that will get me a account maintenance fee waiver. If I invest only $5K, yearly account maintenance fee is $120 for me, which is like 2.4% expense ratio. Like I said in my original post, IB is too expensive for me for the amounts that I have to invest. Here is the universe of international funds available to me if you can suggest a better choice. Thanks. https://www.valueresearchonline.com/fun ... eg%2Cclose
Keen to know what you chose to proceed with. I'm trying to put together a simple portfolio for my brother back in India. Any advice would be much appreciated.

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