A smart investor is one who always seeks out opportunities that provide more return for lesser risk involved. And in a globalised world, the smart way to think for an investor is to expand vision and diversify investments even outside the country. In an interview with Outlook Money, Rogelio Caceres, Co-Founder and Chief Commercial Officer at LCR Capital Partners, shares how and why one can invest in overseas markets.
1. Why should one look at overseas markets for investments instead of sticking to the Indian market?
As an investor one should always seek out opportunities that are the most beneficial. It is the basic ethic of any investor who has the acumen to judge and select the right opportunity. Therefore, an investor should leave no stone unturned before making an investment.
India has seen exponential economical growth with digitisation and better integrated banking system becoming one of the biggest supporting pillars. However, the market is still growing and has limited number of opportunities and products available. The volatile currency of India has also witnessed depreciation recently. Therefore, it becomes ideal for Indian investors to step beyond the domestic territory and explore the global market and the variety of products in every asset class that it offers.
2. Apart from limited opportunities in India, what other benefits are there to investing overseas?
It will also help in diversifying one’s investment portfolio and will have a potential to sustain a long term growth providing enhanced returns. Thus, in order to invest in the best avenue an investor should take expert advice andguidance to exploit opportunities tactically and to the maximum of its ability.
3. How can Indians invest in overseas markets? What are the processes involved?
In India, any money that is sent by an individual abroad is subject to government jurisdiction and evaluation which is long and tedious. In order to liberalise these approvals the government of India introduced LRS (liberalised remittance scheme) which allows individual investors with PAN card to send out USD 250,000 per person per financial year.
Investor has to select country/currency/asset class/products/risk profile/manager/ and then do their research and due diligence on each before making any investment. It’s the same as any other investment in India, except it’s offshore. A person should reach out to their wealth manager or financial advisors as a start for this and should have read thoroughly about chosen asset class and product.
4. Which kind of investors should look at these investments?
Investors with an objective of diversifying their investment portfolio who are seeking access to theme based investments that may fulfill their key objective and provide long term growth and returns.
5. What factors should an investor keep in mind while investing in overseas markets?
An investor should keep in mind the following parameters before doing an overseas investment: country risk, currency risk, policy changes in India and invested country, regulatory risk, risk profile of the investment product, manager risk, liquidity and ease of repatriation.
6. Which overseas markets in today’s time offer better opportunities that one should be looking at?
The largest consumer market of the US is a perfect place for a potential investment. The American dollar is the most accepted currency of the world and act as a barometer for some.
The gigantic and complex American market provides access to a variety of asset classes and products due to its liquid and attractive nature making it an ideal destination for investors and businessmen.