Indian investors flock to US stocks

Mumbai: The year 2021 was the busiest year for IPOs in the last two decades. In 2021, 399 IPOs collectively raised $142.5 billion. Not only were the deal counts highest ever since 2000, 2021 was also the year with the largest IPO proceeds, ever. Freshworks, Robinhood, Coinbase and Didi were some of the most popular IPOs popular with Indian investors.

"As of date, Coinbase is held by 1.3 per cent Vested customers, which makes it one of their top holdings. Meanwhile, Freshworks and Robinhood are held by 0.7 per cent and 0.3 per cent customers respectively. Meanwhile, DiDi ran into some regulatory issues and is now being delisted from the US exchanges," Viram Shah, co-founder and CEO, Vested Finance, told Bizz Buzz.

At the beginning of 2021, due to a rise of zero brokerage investing apps and social investing platforms like Reddit, retail investors made a beeline for meme companies like GameStop (GME) and AMC. The prices of these companies went through the roof. As on January 27, the YTD returns for GME stood at 1914.55 per cent. With an explosion in trading volumes, many brokers limited trading of these stocks due to regulatory requirements. GME and AMC were the top stocks on the Vested platform for almost a month. However, over time, invest or interest in these stocks reduced and investors sold the stocks. This put both these stocks among the top ten stocks investors sold on the Vested platform, he said.

For the second year in a row, Tesla remained the favourite stock for Indian investors, contributing to 18 per cent of total trades, and was the top bought and sold stock on the Vested platform. Currently, 6.9 per cent of investors on the Vested platform own the Tesla stock.

The US markets outperformed the Indian markets in 2021. Overall returns of the S&P 500 YTD (as on December 23, 2021) was 25 per cent, as compared to the returns of the Nifty which stood at 21 per cent.

Indian investors also benefited from the rupee depreciation of three per cent this year, which effectively adds to the INR returns made by them.

Several factors point towards the fact that the markets may remain volatile in 2022. The Fed's projected interest rate hikes may push up bond yields which could compete with stocks for investor dollars.

Supply chain disruptions that have led to rising consumer prices may also spoil the party. Also, current valuations may be on the higher side.

However long-term retail investors, Shah said, would do well to stay invested in the domestic and international stock markets based on their asset allocation and risk profile. Investors would also do well to look out for opportunities that may come up all year long.