How to invest in Indian markets Quck guide for NRIs

Mr ABC an NRI, and he wants to invest his money in the Indian markets. These are his needs:

• He wants to invest in the best options available in India for a period of five years.
• He does not want liquidity. Nor does he want a lock-in.
• He wants to repatriate his money back.
• He has NRO and NRE bank accounts.
• He wants least operational hassles.

But he's not sure in which instruments to invest in and how to go about it.

Here's one good option: Mutual Funds.

One of the easiest, most hassle free routes to invest in the Indian markets, mutual funds, are managed by professional fund managers.

Hence, it is less troublesome choosing mutual funds as compared to direct equity (where one needs RBI Approvals before opening a trading and demat account). Mutual funds need not be looked at daily; a periodic review is more than enough. One has to keep track of the portfolio as a whole. Hence an Investment Advisor (qualified of course!) is the best option.

Advisors also provide operational assistance while investing in mutual funds.

The procedure is quite simple:

Step 1: The advisor understands your needs and recommends a scheme or multiple schemes, accordingly.

Step 2: The form can then be e-mailed to you, you can sign and send the application form by post/courier

Step 3: A demand draft could be ordered through your bank to be delivered directly to your advisor. This prevents the problem of loss of cheques in transit.

Step 4: The advisor then acknowledges receipt of the forms and drafts to you by e-mail and also scans and sends you a copy of the filled application form for your records.

Step 5: The investment form is sent to the respective fund house and you receive the account statement via e-mail.

The advisor sends you a periodic update of the portfolio and also recommends any changes that need to be made due to any change in the circumstances (Move of the fund manager, markets run up too high, booking losses etc)

In addition, if you have made switches or redemptions, your advisor is also expected to keep record of the switches made and also confirm with you if you have received the redemption proceeds directly in you bank account.

Note the following:

1. Amount invested from NRE account is repatriable.
   
2. Amount invested from NRO account is non-repatriable.
   
3. NRIs are not required to submit PAN Cards (Indian nationals need to submit PAN Card copies for investing more than Rs 50,000).
   
4. NRIs need a correspondence address in India.
   
5. NRIs prefer a comprehensive long term solution.
   
6. Minimum paperwork.
   
7. Identifying good long term schemes and advising growth option.
   
8. Support for filing taxes in India.
   
9. Advice on whether the income from mutual funds need to be clubbed by them internationally (varies for different countries).

NRIs looking to return to India after a couple of years and who are looking to invest a huge sum of money, can look at investing in property.

Money mantras

Mutual Funds are hassle free investments for NRIs.

Growth option is best, as NRIs look for long term growth in assets.

Dollar-Rupee fluctuation must be kept in mind.

Look for a qualified Investment Advisor.

Periodic updates and switches must be sent to you on a regular basis.