If US Stocks portfolio diversification is your goal then investing in the S&P 500 is vital. After all, the Standard & Poor's (S&P) 500 is a market index that tracks the performance of the top 500 companies listed on stock exchanges in the US and is widely considered to be a leading indicator of the overall health of the US stock market.
The companies represented in the S&P 500 index are selected based on market capitalisation, time-proven performance, financial stability, and liquidity across a diverse range of industries, including technology, finance, healthcare, energy, consumer goods, and more.
Indirect investment is a convenient form of gaining exposure to the S&P 500 index via mutual funds or exchange-traded funds (ETF). The fund's objective is to closely replicate the overall index's performance. While a mutual fund gives you the added benefit of SIP-based investing, an ETF is more liquid and can be freely traded on the stock exchange, like regular shares.
If you prefer a more hands-on approach and have the time/energy to research stocks, you may buy S&P 500 stocks directly on the stock market. To invest directly, you can:
There are plenty of reputed Indian brokerage firms that allow direct access to US stocks, including those in the S&P 500 index. Most offer a digital account opening and trading experience with access to a mobile app (and sometimes a web-based portal for extra convenience). Before choosing the broker, always research their background, credentials, track record, terms & conditions, and trading + account maintenance costs. It is also prudent to check the basket of stocks they have to offer and any other statutory limitations imposed beforehand.
Some foreign brokers have started their operations in India & you can open an account with them to trade in S&P 500 stocks directly. However, since you will be dealing with a foreign entity, you must fully understand its cost structure, governing regulations, and any tax liabilities.
Investing in the S&P 500 index can be advantageous. However, take time to evaluate the platform you choose to invest with. This is why Fi Money is a great option! This SEBI-recognised entity lets you invest in top US companies — at industry-best forex rates. So you can own shares in Apple, Tesla, Microsoft, and so on! With an intuitive user interface, Fi simplifies the world of US Stocks. Besides in-app explainers, novice investors can use Curated Collections (like All-Time Favourites) to make decisions. Seasoned investors can dive deeper, apply many filters (like Stock Price) & pick from a wide range of international options. What's more, on Fi, you can buy US Stocks instantly with zero brokerage fees.
Most brokers let you open a US Stocks investment account for free. After that, it depends on how much you wish to invest, as brokers tend to have different account maintenance and trading charges. Do your research & evaluate your options before selecting a broker.
Generally speaking, yes! The S&P 500 index comprises 500 large US companies and is a great avenue to diversify your holdings, hedge your risks, and earn potentially high returns. However, if you’re thinking – ‘should I invest everything in the S&P 500?’ then be moderate in your approach. Your investment needs to be backed by sound research. Never put all your eggs in one basket!
