Is there any currency ETF in India?
In India, currency ETF has become highly popular among traders who want exposure to the currency market. However, you should be careful and consider a few things before you invest in currency Exchange Traded Funds. The considerations should include the following.
What is a currency ETF in India? Exchange-traded funds (ETFs) are investment vehicles that are aggregated and hold foreign currency assets. These vehicles trade like shares on stock exchanges. Replicating changes in international exchange rates or currency pairs against Indian Rupees is the aim of this.
You can purchase US ETFs directly via a domestic or international broker or purchase an Indian ETF of international indices.
| Symbol Symbol | ETF Name ETF Name | ETF Database Category ETF Database Category |
|---|---|---|
| BITO | ProShares Bitcoin Strategy ETF | Currency |
| ARKB | ARK 21Shares Bitcoin ETF | Currency |
| BITB | Bitwise Bitcoin ETF Trust | Currency |
| UUP | Invesco DB US Dollar Index Bullish Fund | Currency |
| Schemes | Latest Price | Returns in % (as on Feb 29, 2024) |
|---|---|---|
| ICICI Prudential Nifty ETF | 242.32 | 10.55 |
| HDFC Nifty 50 ETF | 240.69 | 10.54 |
| Motilal MOSt Oswal M50 ETF | 224.44 | 10.55 |
| Nippon ETF Nifty BeES | 243.25 | 10.55 |
Currency futures are traded on platforms offered by exchanges like the NSE, Bombay Stock Exchange (BSE), MCX-SX. Currency trading usually happens from 9.00 am to 5.00 pm. You need to open a forex trading account with a broker to do trading in the live currency market. You may not need to open a demat account.
Currency trading in India is only allowed in 7 pairs- USD/INR, EUR/INR, JPY/INR, GBP/INR, EUR/USD, GBP/USD, and USD/JPY. Three stock exchanges facilitate forex trading in India- NSE, BSE and Metropolitan Stock Exchange of India- jointly regulated by SEBI and RBI.
NRIs are allowed to Invest in Exchange Traded Funds (ETFs). NRIs can invest in ETFs both on repatriation as well as non repatriation basis.
For long-term capital gains from gold, debt, or international ETFs, the tax structure is at 20%, along with indexation benefits. For short-term capital gains, the amount will be added to the investor's annual income and taxed as per the applicable income tax slab rates.
| Symbol | Name | 5-Year Return |
|---|---|---|
| IYW | iShares U.S. Technology ETF | 24.24% |
| FTXL | First Trust Nasdaq Semiconductor ETF | 23.14% |
| XSD | SPDR S&P Semiconductor ETF | 23.09% |
| SPXL | Direxion Daily S&P 500 Bull 3X Shares | 22.97% |
What are the risks of currency ETF?
Risks of Currency ETFs
If an investor holds assets denominated in a particular currency and invests in a currency ETF that tracks the same currency, a decline in the currency's value could result in losses on both fronts. Limited Returns: Currency ETFs typically pay very limited dividends, if at all.
The most popular way to invest in currencies is in the forex, but investors can buy mutual funds, ETFs, or ETNs. Investors are exposed to global currencies by investing in multinational corporations.
Why have them in your portfolio? Depending on the types of assets already in your portfolio, having non-dollar currency exposure may provide additional diversification. Some investors may also use currency ETFs to hedge non-dollar liabilities or to speculate on exchange rates.
ETFs are useful for diversifying your portfolio. However, there are 3 risks of ETFs you need to be conscious of. Firstly, this is a market product and hence it is subject to the fluctuations of the market. While the trading starts around the indicative NAV, actual prices may fluctuate with the market conditions.
"[It] has been one of the emerging market standouts thus far, so India has been a great story." The firm's Franklin FTSE India ETF (FLIN) has risen 18.19% in the past year, as of Tuesday's close. Reliance Industries , HDFC Bank and Infosys are among its top holdings.
Inflows into U.S.-listed ETFs focused on India made up more than half of the global India-focused fund flows in 2023, with the $2 billion WisdomTree India Earnings ETF and the $7.9 billion iShares MSCI India ETF dominating buys.
Conclusion. Forex and currency trading in India is legal but failure to adhere to authorised brokers or permitted currency pairs is a penal offence under FEMA. If you are interested in online forex trading in order to make your portfolio a diverse one. make sure you check the broker's credentials.
Leverage: Forex trading in India allows for leverage, which means that traders can control larger positions with a smaller amount of capital. This can potentially lead to higher profits, but it also comes with higher risks.
How to trade forex in India. To trade forex as a resident of India, you will either be working with a SEBI-regulated broker that offers exchange-traded currency derivatives or with a foreign broker (preferably regulated and trustworthy) that offers retail forex from a margin account.
With over 12 years of experience in the forex market, Shashikant Sharma is undoubtedly one of the most successful traders in India. He has built a reputation for himself as a consistent and profitable trader, thanks to his deep understanding of market dynamics and risk management strategies.
Can I deposit foreign currency in India?
How to deposit foreign currency in Indian bank? One can open a Resident Foreign Currency (Domestic) account with a bank in India and deposit foreign exchange earnings repatriated to India through a banking channel.
Brokers like HDFC Securities, ICICI Direct, and Kotak Securities are examples of SEBI-registered brokers that offer forex trading services. Banks: Many major banks in India, such as ICICI Bank, HDFC Bank, Axis Bank, and State Bank of India, offer forex trading services to their customers.
NRIs can only trade on delivery basis in Indian equities. So, intraday trading, BTST trading, STBT trading and even short selling is not open to NRIs. Currently, NRIs have been permitted to trade in Indian equities and F&O but they are barred from trading in currency derivatives and in commodities.
Yes, you can access your Zerodha account from abroad.
- Fixed Deposits. Fixed Deposits, or FDs, are among the safer ways to invest in India for an NRI. ...
- National Pension Scheme. ...
- Equity. ...
- Mutual Funds. ...
- Real Estate. ...
- Public Provident Fund. ...
- Bonds and Non-Convertible Debentures. ...
- Pre-IPO Investment.
References
- https://www.motilaloswal.com/blog-details/punishment-for-forex-trading-in-india/20624
- https://www.chittorgarh.com/report/best-nri-trading-account-in-india-brokerage-charge/68/
- https://www.lendenclub.com/blog/where-to-invest-1-lakh/
- https://blog.shoonya.com/tax-on-etf-in-india/
- https://www.totaram.com/education/traveling-to-india-learn-about-gold-jewelry-allowance-and-customs-regulations/
- https://www.schwab.com/etfs/types/currency-etfs
- https://m.economictimes.com/markets/stocks/news/top-5-etfs-that-have-given-up-to-61-returns-in-1-year/yield-leaders/slideshow/103084536.cms
- https://m.economictimes.com/mirae-asset-sp-500-top-50-etf/mffactsheet/schemeid-41698.cms
- https://santandertrade.com/en/portal/establish-overseas/india/foreign-investment
- https://www.fisdom.com/what-is-nifty-bees/
- https://www.fidelity.com/learning-center/investment-products/etf/drawbacks-of-etfs
- https://www.morningstar.com/etfs/how-maximize-tax-efficiency-etfs
- https://www.motilaloswal.com/blog-details/risks-of-investing-in-us-stocks/20734
- https://www.investopedia.com/articles/investing/061615/how-etf-dividends-are-taxed.asp
- https://unacademy.com/content/full-forms/nri-full-form/
- https://www.investopedia.com/articles/investing/121515/why-3x-etfs-are-riskier-you-think.asp
- https://www.investopedia.com/financial-edge/1010/5-ways-to-invest-in-currencies.aspx
- https://www.wintwealth.com/blog/differed-ways-for-nris-to-invest-in-gold-in-india/
- https://www.vance.tech/blog/nri-sip
- https://investor.vanguard.com/investor-resources-education/taxes/how-mutual-funds-etfs-are-taxed
- https://www.livemint.com/money/personal-finance/a-guide-to-investing-in-indian-stocks-for-nris-eligibility-criteria-demat-accounts-pis-taxes-and-charges-11687369110247.html
- https://www.motilaloswal.com/blog-details/how-does-nris-trade-in-the-indian-stock-markets-/1867
- https://groww.in/p/nri-account
- https://www.finder.com/savings-accounts/12-interest-savings-account
- https://scripbox.com/pf/nifty-bees/
- https://www.fidelity.com/learning-center/investment-products/etf/tax-rules-for-losses-etfs
- https://groww.in/blog/index-funds-vs-etfs-top-differences-you-must-know
- https://www.quora.com/Why-is-ETF-not-that-popular-in-India
- https://www.investopedia.com/articles/exchangetradedfunds/09/etf-out-of-business.asp
- https://www.quora.com/How-can-NRIs-invest-in-the-US-stock-market
- https://www.policybazaar.com/life-insurance/investment-plans/sip-for-nri/
- https://www.5paisa.com/stock-market-guide/generic/nre-account
- https://tradingqna.com/t/can-an-indian-access-zerodha-account-from-abroad/87476
- https://groww.in/blog/how-are-etfs-taxed
- https://wealthdesk.in/blog/are-etfs-good-for-long-term-investing/
- https://www.titan.com/articles/etf-drawbacks
- https://www.zeebiz.com/personal-finance/news-sip-15x15x15-formula-can-make-you-a-crorepati-in-15-years-even-at-age-40-sip-calculator-how-to-become-a-crorepati-mutual-funds-saving-investment-strategy-monthly-income-264231
- https://www.nobroker.in/forum/how-to-deposit-foreign-currency-into-a-bank-account/
- https://www.linkedin.com/pulse/forex-trading-profitable-india-beginners-jun-ny-nxgpe
- https://www.quora.com/How-do-I-buy-and-sell-international-stocks-in-Zerodha
- https://managementstudyguide.com/are-index-funds-not-a-good-investment-in-india.htm
- https://www.etmoney.com/learn/mutual-funds/comparing-nifty-50-etf-vs-nifty-50-index-fund/
- https://etfdb.com/compare/highest-5-year-returns/
- https://www.investopedia.com/investing/top-india-etfs/
- https://brokerchooser.com/best-brokers/best-brokers-us-stocks-from-india
- https://www.etmoney.com/mutual-funds/featured/best-index-funds/12
- https://etfdb.com/etfdb-category/currency/
- https://www.investopedia.com/articles/investing/110314/key-differences-between-etfs-and-mutual-funds.asp
- https://www.reuters.com/technology/india-etf-flows-hit-record-2023-analysts-see-momentum-persisting-election-year-2024-01-15/
- https://www.zeebiz.com/personal-finance/news-systematic-investment-plan-how-an-nri-can-invest-in-sips-in-india-stst-256198
- https://groww.in/blog/how-can-nris-invest-in-mutual-funds-india
- https://curvo.eu/article/etf-risk
- https://www.5paisa.com/share-market-today/s-p-500
- https://www.shareindia.com/knowledge-center/mutual-fund/what-are-etfs-and-how-do-they-work
- https://groww.in/blog/tax-implications-of-investing-in-us-stocks
- https://money.usnews.com/investing/articles/best-tax-free-municipal-bond-funds
- https://www.nirmalbang.com/knowledge-center/investing-in-foreign-stocks.html
- https://www.linkedin.com/pulse/top-10-best-forex-broker-india-app-trading-platform-2024-yohwc
- https://www.businesstoday.in/personal-finance/investment/story/indias-etf-market-has-jumped-to-rs-65-lakh-crore-grabbing-13-of-mutual-funds-says-nam-indias-arun-sundaresan-414654-2024-01-24
- https://www.canstar.com.au/investor-hub/buy-sell-hold-etfs/
- https://www.compareremit.com/money-transfer-tips/how-to-invest-in-indian-stocks-from-the-us/
- https://www.fidelity.com/learning-center/investment-products/etf/risks-with-etfs
- https://www.motilaloswal.com/blog-details/how-to-invest-in-nasdaq-as-an-indian-investor/20501
- https://www.nirmalbang.com/knowledge-center/nifty-vs-sensex.html
- https://www.linkedin.com/pulse/top-10-richest-forex-trader-india-2024-tech-it-online-tw66c
- https://groww.in/mutual-funds/equity-funds/elss-funds
- https://aliceblueonline.com/nifty-bees-vs-index-fund/
- https://www.financialexpress.com/money/income-tax-exchange-traded-fund-how-are-etfs-taxed-in-india-3372738/
- https://www.policybazaar.com/life-insurance/investment-plans/articles/safe-investment-with-high-returns/
- https://www.hdfcbank.com/personal/resources/learning-centre/save/difference-between-nre-and-nro-account
- https://www.quora.com/What-happens-to-your-ETFs-if-your-ETF-invested-company-goes-bankrupt-Do-you-lose-all-your-money-invested-in-your-ETFs-to-the-company-s-bankruptcy
- https://www.fidelity.com/learning-center/investment-products/etf/which-is-right-for-you
- https://www.kotaksecurities.com/equity/what-is-nifty-bees/
- https://www.reuters.com/markets/asia/how-foreign-investors-can-invest-india-2024-02-05/
- https://www.business-standard.com/finance/personal-finance/can-nris-invest-in-gold-in-india-all-you-need-to-know-about-regulations-123110700137_1.html
- https://www.schwab.com/learn/story/what-happens-if-your-etf-closes
- https://www.amfiindia.com/investor-corner/knowledge-center/etf.html
- https://groww.in/blog/how-to-invest-in-us-stocks-from-india
- https://www.icicidirect.com/idirectcontent/Home/StaticData/WeOfferETFUnderstanding.html
- https://www.valueresearchonline.com/stories/51500/are-dividends-on-etfs-credited-to-the-investor-s-account/
- https://www.investopedia.com/articles/exchangetradedfunds/08/etf-taxes-introduction.asp
- https://vestedfinance.com/
- https://www.indianeagle.com/traveldiary/how-much-gold-can-i-carry-from-usa-to-india/
- https://www.morningstar.com/funds/25-top-picks-tax-efficient-etfs-mutual-funds
- https://www.cnbc.com/2024/01/24/why-japan-and-india-etfs-are-gaining-popularity-with-investors.html
- https://www.nseindia.com/resources/150-etf-nse
- https://www.angelone.in/knowledge-center/mutual-funds/are-etfs-a-good-option-for-the-long-term
- https://www.angelone.in/knowledge-center/mutual-funds/invest-in-sp-500-stocks-through-index-funds
- https://freefincal.com/nifty-bees-etf-vs-uti-nifty-index-fund-which-is-better/
- https://www.indmoney.com/us-stocks
- https://www.forbes.com/advisor/in/investing/how-to-invest-in-foreign-stocks-from-india/
- https://www.investopedia.com/articles/stocks/09/buying-stock-or-etf.asp
- https://www.cnbc.com/2023/12/23/india-is-a-perfect-emerging-market-for-investors-says-etf-expert.html
- https://investor.vanguard.com/investor-resources-education/news/vanguard-launches-two-tax-exempt-bond-etfs
- https://www.shareindia.com/knowledge-center/currency-trading/what-is-currency-etf
- https://www.religareonline.com/knowledge-centre/online-share-trading/exchange-traded-funds-etf/
- https://www.quora.com/How-do-I-trade-in-the-US-stock-market-from-India-s-Zerodha-kite
- https://fi.money/blog/posts/best-investment-options-for-nris-in-india-2023
- https://money.usnews.com/funds/etfs/rankings/india-equity
- https://www.nseindia.com/trade/members-faqs-nri-trading-account
- http://zerodha.com/z-connect/wp-content/uploads/2012/11/etfs.pdf
- https://www.forexbrokers.com/guides/india
- https://www.indmoney.com/articles/how-are-et-fs-taxed
- https://www.nirmalbang.com/knowledge-center/all-about-currency-trading.html
- https://support.zerodha.com/category/account-opening/nri-account-opening/articles/how-to-open-an-account-as-a-nri
- https://groww.in/blog/how-to-invest-in-us-stocks-via-mutual-funds
- https://www.dbs.com/in/treasures/articles/nri-hub/live-enriched/how-many-days-nri-can-stay-outside-india
- https://www.moneycontrol.com/mf/etf/
- https://kuvera.in/us-stocks/tesla-inc-tsla
- https://www.5paisa.com/investment-products/currency-trading
- https://scripbox.com/mutual-fund/us-equity
- https://www.tickertape.in/blog/where-you-can-invest-money-in-india/
- https://www.schwab.com/learn/story/etfs-and-taxes-what-you-need-to-know
- https://travelopod.com/blog/post/the-savvy-traveler-s-guide-to-bringing-gold-jewelry-and-items-to-the-usa-and-india
- https://www.nasdaq.com/articles/currency-etfs-benefits-risks-and-examples
- https://www.livemint.com/money/personal-finance/what-are-the-benefits-and-limitations-of-investing-in-exchange-traded-funds-mintgenie-explains-11704286809054.html
- https://fi.money/blog/posts/tax-implications-of-investing-in-us-stocks
- https://www.motilaloswal.com/blog-details/differences-between-indian-stock-market-and-us-stock-market/20584
- https://www.motilaloswal.com/blog-details/Beginners-Guide-to-Investing-in-ETFs/1547
- https://www.livemint.com/economy/tsunami-of-capital-from-global-investors-lies-in-store-for-india-in-2024-etf-expert-11703813676662.html
