Indian investors spare no effort when it comes to diversifying their portfolios. Along with dabbling in real estate, gold, debt and domestic equities, investors began buying US stocks to hedge their portfolios against economic risk.
Winvesta’s Quarterly Investor Pulse Report for the April-June quarter highlights investor preferences during the quarter for U.S. stocks and ETFs, growth in assets under management despite the market correction and many other factors.
Despite the significant correction seen by US equities in the last quarter, Winvesta’s overall assets under management (AUM) increased by 65% year-over-year, as of June 30, 2022. Trading volumes during the same 12-month period were multiplied by 2.5.
A majority of Indians continue to choose single stocks over ETFs as their preferred mode of exposure on Wall Street, although ETF allocation is increasing. The share of ETFs as a percentage of Winvesta’s assets under management increased to 24.75% in the second quarter of 2022, from 17% in the first quarter of 2022.
For many Indian investors, when they first hear of US stocks, “FAANG” stocks are the first that come to mind. However, on the Winvesta platform, there is a wide range of over 4,500 stocks and ETFs to choose from.
FAANG shares represent only 14% of the total equity investment through the platform, which is lower than last year’s figure of 17%.
As for the most traded stocks on Winvesta’s platforms, meme stocks made an exit this year as they were among the most traded during the second quarter of 2021.
Otherwise, investors continue to bet on Apples and Teslas. Twitter is also making an appearance in the second quarter of this year due to who else but Elon Musk! Crypto as a theme remained prominent, with stocks like Coinbase making the cut in 2021 and 2022.
As previously highlighted, ETF allocation is increasing on the Winvesta platform. People are betting on Cathie Wood’s ARK ETFs for most of 2021. With a massive erosion in value, these ETFs have fallen out of favor among investors. Instead, they opted to park their money in other alternatives that played on market volatility like SQQQ.
Through Winvesta’s platform, investors can also invest in fractional US stocks. For example, one can buy 1% of the shares of Alphabet (Google’s parent company) for about $22 and it is not necessary to have $2,200 to participate in the growth of the company (the price of GOOGL stock is around $2,200).
Investors obtain capital gains, dividends and voting rights proportional to their participation. Alphabet also recently announced a 20-to-1 stock split. The average account size on Winvesta’s platform saw a marginal jump from $5,000 to $5,300. The average deal size saw a substantial jump from the June quarter of last year.
Due to the modest fixed fees involved in the remittance process, most investors prefer to make lump sum transfers and then invest them over time. However, many clients make repeat payments as systematic or opportunistic investments.
Winvesta’s clients are spread across the country, with the majority of the clientele geared towards the younger population. The 20-40 age group constitutes nearly 80% of the clientele. Residents of Tier II and Tier III cities also open and fund their accounts on the platform with Metros. With Winvesta’s digital onboarding and KYC, an Indian living anywhere in India can create an account and invest in US stocks.
The majority of investors remain men. However, the number of female investors, which had doubled to 12% in the first quarter of this year, fell back to 6% in the second quarter.