Why Morningstar CEO Advises Indians To Consider Overseas Markets
Indian equity markets don't look attractive when analysts look at other parts of the world where valuations got "crushed".
While the Indian equity market saw substantial selling by foreign institutional investors in 2022, it still outperformed global peers. That, according to Kunal Kapoor, chief executive officer at Morningstar Inc, presents an opportunity.
Kapoor said Indian equity markets don't look attractive when analysts look at other parts of the world where valuations got "crushed".
Indian investors have an opportunity to invest in overseas markets have dropped substantially, according to Kapoor. "This is a good point to think about taking some of your winnings locally and investing in some markets that have underperformed outside of India."
Indian investors can buy stocks abroad either directly by using the Liberalised Remittance Scheme or through the Indian asset management companies that invest on their behalf.
However, the Securities and Exchange Board of India has asked the Association of Mutual Funds in India to restrict inflows into such funds after the industry came close to breaching the limit for overseas investments that was set by the Reserve Bank of India.
On the influx of young investors into the equity markets in India, Kapoor said technology and the democratisation of information were increasing access to the financial markets.
But they also make it easier to make mistakes, Kapoor said, adding that it was important to have a straightforward approach to investing. He said competence and comfort is important when one is investing.
"Sometimes, you don’t need to have the next hottest thing. You don't need to have what your neighbour has," he said. "But if you sleep well at night, that’s really priceless."
Watch the full interview below