- Since the liberation day shocker on 2 April, US indices are down nearly 6%
- Unlike other major global markets, India has recouped its losses
- Notwithstanding Trump’s tantrums walloping US stocks, several Indian mutual-fund managers swear by them
- But RBI restrictions prevent investors from using the mutual-fund route to invest overseas. The alternative is sub-optimal
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Stock markets work in mysterious ways. Sometimes, you hit the jackpot when you try to understand the pattern and respect it. And sometimes, when you go against the grain and the dominant narrative.
If you took a contrarian view after US President Donald Trump introduced reciprocal tariffs on global imports on 2 April—that is, if you bought the dips in the Indian market—you’d have made money. The relief rally fuelled by the 90-day tariff
Enter again, the contrarian view.
Five senior mutual-fund executives and two registered investment advisors The Ken spoke with strongly recommended investing in US stocks. With Trump, without Trump, in spite of Trump.
And why? Because there’s no real alternative to the greenback. The US is still the host to several of the world’s most dominant companies, and it’s a great idea to diversify one’s portfolio outside one’s home country. Most Indian equity investors have only Indian stocks in their portfolios—the home bias that comes with concentrated country risk.
“But any serious investor who wants to benefit from cutting-edge innovation and the next big thing has to be invested in the US, too,” said a former fund manager.
The US stock market commands the lion’s share of over 60% of global market capitalisation, with modern tech companies ruling the roost. India, meanwhile, accounts for just 2–3%.
“It’s distracting to see the leader of the largest economy in the world act like a goon,” said a senior mutual-fund executive. “But remember, his term is four years. Globally dominant US firms will outlast him.” The executive did not want to be named as he is not allowed to speak with the media.
Some even advocated buying Chinese stocks.
Except, most retail Indian investors don’t really have an alternative. They are being forced to invest only in India or go through a sub-optimal route to put money abroad.
Credits
Written by Anand Kalyanaraman
Edited by Abhijith S Warrier
Lede illustration by Kavipriya OG
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