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I am an Indian Citizen residing in India. Can I invest in an S&P500 Index fund while residing in India?

  • With no comment from the person who flagged this off-topic explaining why, I'm voting to leave it open. – Rupert Morrish Nov 26 '18 at 19:08
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Can I invest in S&P500 Index fund, while residing in India

You can invest in US funds. Under the Liberalized Remittance Scheme one can invest up to USD 250,000 per year.

Option 1:
Open an account with an international broker. This is time consuming and KYC etc would take time. Transferring funds will also involve a bit of paperwork. You can then invest into a range of funds that track the S&P 500.

Option 2:
Open an Account with an Indian broker [or with AMFI]. There are quite a few fund houses that offer funds that invest in US markets; for example ICICI, Franklin, Motilal Oswal, DSP Blackrock, Birla Sunlife, etc. Most of these invest in a broad range of equity. Motilal has NASDAQ 100; it has filed a prospectus for S&P.

This would be more convenient in terms of KYC or depositing / withdrawing as your interaction will be with the Indian fund house.

5

There are 2 aspects to your questions as I perceive it. Whether or not you are eligible to invest in it as a non-US resident and whether or not you have access to it outside the US.

The short answer to both is yes.

You're perfectly fine to invest in USA based ETFs as a non-resident. The second part I cannot help directly with since I'm not based in India but for instance, in the EU, you can open local broker accounts to invest in cross-continent ETFs or skip that altogether and invest in ETFs and similar financial products through a robo-advisor (like Moneyfarm, Scalable, ETFmatic etc).

I'm fairly certain that for a big market like India you should be able to find someone offering broker accounts and/or robo-advisor options that include USA ETFs.

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Charles Schwab, DriveWealth, Interactive Brokers, and a few others allow non resident aliens (not US citizen) that aren't active stock traders (i.e. only a few transactions every month) to open accounts with them.

Personally I find DriveWealth (you can sign up here) to be the most accessible one, due to not having any minimum balance and having low fees ($2.99 per transaction). They only charge a one-time $5 fee to file the W-8BEN tax form for you.

You can search for them and easily find coupons/referral codes that even give you $5 in Google stock for free when you sign up.

Further reading about this subject: How non-US citizens can invest in the US stock market?

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