Global investing is no longer optional for Indian investors—but diversification is more than buying NVIDIA and Apple: Dhiraj Relli

India remains one of the world's fastest-growing major economies, but a strong domestic growth story may no longer be enough reason for investors to keep their entire portfolio within national borders.

With the Nifty50 trailing several global indices in recent months and the rupee facing continued depreciation against the US dollar, Indian investors are increasingly looking overseas for diversification, access to new-age technology companies and global growth opportunities.

But simply buying familiar names such as NVIDIA, Apple or Tesla does not automatically create a diversified international portfolio, warns Dhiraj Relli, MD & CEO of HDFC Securities.


“Global investing is no longer optional for Indian investors,” Relli argues, while cautioning that a portfolio concentrated in a handful of large US technology stocks could merely replace one form of concentration with another.

From the growing popularity of ETFs and basket investing to the real challenges of LRS limits, taxation, currency conversion costs and compliance, Relli explains why global investing needs to be treated as a long-term structural allocation rather than a reaction to the latest Wall Street rally. Edited Excerpts

Q) Global investing is no longer optional for Indian investors. Isn't that a slightly aggressive claim when India itself remains one of the fastest-growing major economies?

A) The assertion that "Global investing is no longer optional for Indian investors" may initially seem aggressive, especially given India’s position as one of the fastest-growing major economies. However, this perspective is grounded in several strategic considerations that extend beyond mere economic growth rates.
These include the importance of diversification and risk mitigation, gaining access to global opportunities, leveraging currency and hedging advantages, and capitalizing on global growth trends. Additionally, India’s evolving investment ecosystem now offers greater access to international equities, ETFs, and mutual funds, making global investing more feasible than ever before.

From a recent market perspective, looking at the year-to-date (YTD) performance, the Nifty 50 has declined by approximately 8.5 to 9.5%, while major US indices such as the Dow Jones, S&P 500, and Nasdaq have delivered positive returns ranging from 9% to 13%. Even among select Asian markets, indices like the Nikkei, Straits Times, and Kospi have posted stellar gains despite global shocks.

Furthermore, the significant depreciation of the Indian Rupee against the US Dollar points out the importance of currency considerations. Dollar-denominated assets can serve as a buffer during such times, helping to safeguard investor wealth.

While India’s growth story remains compelling, a solely domestic focus may limit potential returns and expose investors to country-specific risks. Therefore, integrating global investments is not merely a strategic move for diversification but a necessary step to harness broader growth opportunities.

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Q) You have 30,000 active investors but nearly 2 lakh people waiting or expressing interest. What is stopping these investors from taking the final step?

A) The primary gap exists due to certain barriers such as a lack of complete awareness or understanding of the investment process, concerns about security and trust, and uncertainty regarding the timing and potential returns. These are industry-wide challenges and are not exclusive to HDFC Securities. For investors who are interested but still hesitant, there are tailored investment solutions like basket investing and ETF-based investing, which are increasingly gaining popularity. Currently, our focus is on removing these barriers and building confidence among potential investors, encouraging them to take the final step towards investing. In fact, our data indicates that nearly 27% of new investors now make their first investment via ETF rather than a single stock, compared to less than 2% a year ago. Additionally, we observe that 29% of investors who initially started with stocks later add ETFs to their portfolio, clearly indicating a gradual shift towards managed and thematic investment approaches.

Q) How much of the growth is coming from first-time international investors versus investors who were already investing overseas through other routes?

A) Industry-wide data including RBI’s LRS remittance figures show investment outflows into overseas equity and debt rising sharply over the past year, but that data tracks money, not investor journeys behind it. What we can say basis our client base is that the growth is coming from both fronts. A meaningful share of our global investing clients are investors expanding an already diversified portfolio using it as a natural extension of their domestic strategy. With that said we are seeing genuine first-time interest from investors who are exploring international markets for the first time, drawn by easier access and a desire tom diversify beyond India-only exposure. Rather than one segment displacing the other we observe that the overall base of overseas investors widens both in terms of new entrants and existing investors deepening their allocation.

Q) If most investors are buying NVIDIA, Apple and Tesla, are they genuinely diversifying geographically—or simply increasing their exposure to global technology?

A) This is a valid observation, and we want to be cautious about overinterpreting the current trends. Based on the most popular names among our clients, it’s evident that their preferences lean heavily towards companies like NVIDIA, Micron, AMD, Broadcom, Palantir, Meta, Microsoft, Google, Apple, Tesla, along with names such as MSTR and IREN.

This pattern clearly indicates that investors are not engaging in blind diversification for it’s own sake. Instead, they are making a strategic directional call on specific global themes, particularly AI and compute buildout, with some exposure to crypto-linked assets, automotive, and telecommunications sectors.

Additionally, this approach provides exposure that Indian investors typically cannot access onshore, and it offers some degree of currency hedging. Interestingly, we are also observing an increase in the average number of holdings per user from around 11 stocks last year to approximately 15 stocks this year.

Looking ahead, we expect the portfolio mix to broaden further as more products, such as index funds and sector-agnostic ETFs, become available in the Indian market, enhancing global access for Indian investors.

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Q) Should a first-time global investor start with individual stocks or broad-based ETFs?

A) There are no fixed rules regarding how one should or could invest globally. It largely depends on your investment style, research capabilities, and overall understanding of the markets. If an investor has been active in the markets for a while and possesses a good understanding of global markets, they may consider investing directly in individual stocks. However, if you are a new entrant or an existing investor who still lacks confidence, it is often better to opt for ETFs or basket investing. These options help mitigate the risk associated with individual stocks, which can be affected by company-specific shocks such as earnings misses or regulatory announcements. Additionally, ETFs and basket investments do not require constant monitoring, ongoing stock picking, or detailed company research. They provide instant exposure to multiple companies, which, in my opinion, represents genuine diversification rather than concentrated conviction.

Q) Global investing sounds attractive in a presentation, but Indian investors face LRS limits, tax implications, currency conversion costs and compliance. Are we underplaying these challenges?

A) I believe all the brands, including HDFC Securities, have never positioned global investing as frictionless. It isn't, and investors deserve a clear-eyed understanding of this before they commit capital. The LRS limit of USD 250,000 per financial year is a hard cap. TCS applies above this threshold, and capital gains on overseas assets are taxed differently from Indian equities. Additionally, currency conversion costs can significantly impact returns on both the way in and out. In our conversations with every investor, we ensure they understand the full scope of costs and compliance requirements upfront, rather than discovering surprises at tax-filing time. Where we see a genuine opportunity is in what global markets offer that India currently doesn't being certain technology and innovation themes that simply aren't available on Indian exchanges. However, this opportunity must be weighed against the real costs involved.

Q) What are the biggest misconceptions Indian investors have about investing abroad?

A) There are a few misconceptions we see repeatedly. The first is equating brand familiarity with diversification i.e. owning Apple or Amazon feels safe because the names are recognizable, but from a portfolio-construction standpoint, a handful of large-cap US tech names is concentrated, correlated exposure, not a hedge. The second is underestimating cost and tax friction, investors often don't realize currency conversion, TCS, and differential capital gains treatment on foreign assets can materially affect net returns, especially on smaller portfolios where fixed costs matter more proportionally. The third, and maybe the most important one, is timing-driven thinking which some investors go global reactively, right after a stock has already had a strong run, rather than treating international exposure as a long-term structural allocation. Global investing works best as a patient, planned part of a portfolio.

Q) Fractional investing starts at just $1. Has lowering the entry barrier changed investor behaviour meaningfully—or is wealth still the biggest barrier?


A) Fractional Investing has changed behavior more than it has changed outcomes. It has clearly widened participation, younger, first-time investors who wouldn't otherwise invest in a $200 share are now dabbling with global markets. That's a real shift, but the barrier that lowering entry cost doesn't address is income and savings capacity where India's per-capita disposable income still limits how much most retail investors can meaningfully allocate abroad, especially once you factor in the LRS structure, currency conversion, and tax costs. Fractional investing is a good on ramp but it's not a substitute for the discretionary income needed to build a globally diversified portfolio that actually moves the needle on someone's wealth.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)