The dream to outperform the market looks lucrative, but reality often conflicts. There is a possibility of beating the market with active funds, yet statistically, they tend to perform poorer than the market index. S&P Dow Jones Indices marked the performance of actively managed funds in its annual report. 

According to the report, about 80% of all actively managed U.S. stock mutual funds underperformed in 2021 despite a massive secular bull run. Further, only 26% of all active funds could surpass the returns of their index-fund contemporaries over the decade through December 2021. Hence, It may be the right time to go passive if you are new to investing and looking for sound investment strategies. 

Passive funds mimic the performance of any market index like NASDAQ. Passive instruments like Exchange Traded Funds(ETF) have an edge because they are cost-effective and have good coverage of the Company stocks. You can invest in NASDAQ from India by purchasing an ETF that tracks the market index. 

But why NASDAQ? The tech-savvy NASDAQ is a composite index comprising stocks of over 2,500 companies. The companies in the NASDAQ index tend to be the most innovative, ranging from the technology sector to wholesale, consumer services and retail. 

The NASDAQ-100 companies(the top 101 non-financial corporations) foster innovation and bolster growth. These companies heavily invest in research and development with average annual spending of $1.7 billion. By knowing how to invest in NASDAQ from India, you can tap the vast potential of global ventures, diversify your investment portfolio and be a part of Club 100. 

NASDAQ is the home to prominent global companies like Amazon, Alphabet, Apple, Tesla, Microsoft, and Facebook, amongst many others. These ventures are torchbearers in industries like Artificial Intelligence, EVs, Analytics and Technology. However, how can you have a slice of this glorious growth pie in a pocket-friendly way? 

Are ETFs Cost Effective and hassle-free?

New to investment? Are you baffled about how to start your journey? Investing in NASDAQ from India is easy. You can find your answers by investing in ETFs. ETFs are passive investment vehicles that mirror a market index’s performance. 

Since an ETF is a pool of securities listed as a single trade on the stock market, you get exposure to multiple stocks and can diversify your portfolio. Simply put, when you buy units of ETF, you purchase units of a portfolio, duplicating the native index. 

Investing in ETFs requires no minimum investment and is cost-efficient, making it an ideal option if you are a novice investor. 

Nowadays, Indian investors can utilize the perks of global growth stories by investing in NASDAQ-101 companies. As you can invest in NASDAQ from India, it is essential to know how to do so in a few simple steps. 

Invest in NASDAQ ETF in 4 Easy Steps

• Open Your Brokerage Account 

The NASDAQ ETF marketplace is bustling with cost-effective ETFs, but how to invest in NASDAQ from India? To trade in ETFs, you will need a brokerage account. Through a digitized process, you can open an international trading account with no account minimums.
RBI permits Indian investors to invest in the US stock market under the Liberalized Remittance Scheme(LRS). Platforms like Stockal bring you an entirely digitized LRS procedure. They also help you with the W8-BEN tax form making compliance a cakewalk. 

• Use Screening Tools to Find and Compare ETFs

With a brokerage account in place, the next step is deciding which ETFs you can buy. Many diverse ETFs swamp the US market; hence it is crucial to find the one fitting your requirements. There exist several ETF screening tools that aid you in selecting companies based on the analysis of multiple criteria.
Before you invest in NASDAQ from India, explore the asset type, industry, and history of the company’s performance before affirming your choice. Let’s look at specific screening criteria for you to land the most suitable ETF. 

Volume: Knowing a stock’s trading volume will meticulously indicate liquidity irrespective of the type of asset. If an ETF possesses a higher trading volume, it is likely to be more liquid. With the trading volume figures in place, you can go for the most favored ETFs in the US stock market.

Stock Portfolio: An ETF is a basket comprising stocks of several companies. It can also cover stocks of companies belonging to a particular industry. With the knowledge of the investment portfolio, you can see the stocks with maximum weightage. In short, you get an idea of the leading holdings in the ETF fund.  

Performance: Greater returns to investment stems from careful examination of the ETFs. You wish to invest because you aim to acquire the fund with the best performance. In the ecosystem of financing, the barometer of performance is relative. Compare and analyze the performance history of different ETF funds to arrive at your preferred choice.

Tracking: The function of an ETF is to match the native market index. Knowing how efficiently the ETF tracks the index is key to achieving maximum returns.
Let’s say the ETF that tracks NASDAQ should consist of holdings with returns closest to the actual NASDAQ index. If the index goes up by 15% and the ETF trailing the index fetches a return of 14.50%, it is well done. 

• Analyse and Compare Administrative Expenses

ETFs attract lower costs than active funds due to lower operating costs. Knowing how much you additionally pay is necessary to make a sound decision. 

Administrative Costs: Generally, ETFs’ administrative costs are much lower than actively managed funds. Still, it would be best to look at the expense ratio of different ETFs. You can consider an ETF expense ratio as an operating cost. It indicates the portion of your investment fund which will be deducted yearly as fees.
You can calculate a fund’s expense ratio by dividing its operating expenses by its average assets. In due course of your investment, the expense ratio can significantly alter your investment returns. Select ETFs where the expense ratio is close to zero to grab better investment returns.

Commissions: Buying or selling an ETF entails a fee for every transaction. In other words, the more you like to trade, the higher you shell out commissions. Though some brokerage firms do not levy any commission fee, it is always prudent to check before buying.
Many online investing platforms offer different subscription plans befitting your needs. Additionally, it would help if you were wary of the cost incurred in converting rupees into dollars.

• Select an ETF and Place the trade

The process of trading ETFs is very similar to trading regular stocks. Now that you know how to find the most profitable ETF, you must place the trade. Check out the following points before you go for the ETF trade. 

• Ticker Symbol: A ticker symbol is an abbreviation that uniquely characterizes the ETF you wish to buy. Be familiar with the signs associated with your chosen ETF to make the correct purchase.
• Bid-Ask Spread: There will always be two prices for the selected ETF at any time. The bid price is when someone wants to buy the ETF, and the asking price is for traders willing to sell the ETF. When you start trading in ETFs, compute the bid-ask spread, which is the gap between the two prices.
• Shares Traded: Fix the total amount of shares you desire to buy or sell. 
• Order Types: ETFs incorporate different order types that can benefit your concerns. 

1. 1. Market Orders: ​​If you go for market orders, you can speed up trade at optimum prices available in the market. However, you will not know the price your trade fetches.
   2. Limit Orders: There is also a limit order where you trade ETFs at specified prices. You can set a limit on the trade price, and the limit orders are placed where the lowest ask/highest bid strings first. In these orders, price precedes speed in priority. However, you cannot ascertain if the trade will occur during the entire trading day.
   3. Stop-Loss Orders: Stop-loss orders are curated to safeguard your gains or mitigate losses and stay active in the market till the execution/cancellation of the order. 

• Source of Funding: Before you worry about the volume you wish to trade, fix the money you want to invest in trading. Ensure the bank account linked to your investing account has enough funds to cover the entire cost. 

Investing in Nasdaq from India? Let’s look at other ways.

By investing in an ETF, you now know how to invest in NASDAQ from India. Other possible routes exist to invest in the NASDAQ index besides ETF. You can directly invest from India by opting for the services of an online platform like Stockal or creating a brokerage account in the US. Such platforms make investing straightforward for investors beginning their investing journey. 

Further, you can buy mutual funds that invest in US ventures or utilize the benefits of curated stacks. A thorough analysis will ensure you land the most advantageous trading deals regardless of your pathway to investing in the US markets. With no limit to investing, start your journey with Stockal today.