WHY GLOBAL INVESTING MAKES SENSE FOR INDIANS

India is just 3-4% of world mcap. Putting all your eggs in such a small basket is risky.

- 

Devina Mehra Chairperson & founder, First Global

ONE QUESTION I get often is: Why should Indians look at investing overseas when India is the fastest-growing economy? Let’s look at a few aspects.

First, India is 3-4% of the world market capitalisation in equities. Hence, what would be the reason to put 100% or 90% of your assets in a single geography?

In every country, investors have a home country bias, which means they invest disproportionately in their home markets. In India, this phenomenon is very pronounced. And part of the reason is that historically, we did not have capital account convertibility. Now, Liberalised Remittance Scheme allows you to take out $250,000 per head per annum which, in a family of four, means up to a million dollars every year.

Nevertheless, Indians have still not really gotten around to thinking about global investing. Or if they do, they think buying a Nasdaq ETF is enough. But true global investing means looking at all geographies, all asset classes.

And why’s that?