Initially, it was simply FANG and not FAANG. It was during 2013. when Jim Cramer coined the term FANG stocks which is a collective term for the stocks of the world’s leading technology behemoths – Facebook, Amazon, Netflix, and Google. In 2017, Apple joined the bandwagon to be renamed FAANG.
Since, the outbreak of the pandemic that confined people to their homes, the dependence on OTT platforms, social media, and digitisation of businesses soared resulting in the rallying of these stocks thereby attracting several investors to buy shares of these tech companies.
What makes FAANG stocks popular in India?
Indian investors in India want to build a portfolio that has investments in the foreign market. Investing in a different economy can be beneficial since every economy has its weaknesses and strengths and not all economies become weak at the same time. The stock market here presents a true picture of a nation’s economy. Most Indian investors spread their investments in foreign stock markets mainly in the US financial markets to diversify their portfolio and cushion the risks that might be associated with the Indian stock markets.
The FAANG stocks are the stocks of such companies that are leading in technological advancements that have changed the definition of interacting, socializing, shopping and entertainment and own an expansive consumer base globally. Moreover, in the wake of the pandemic, the companies from FAANG have further revamped their products and offerings and with artificial intelligence, cloud, and machine learning to suit the needs of the new virtual workforce thereby pushing the demand and proving the investment in these stocks to be lucrative.
FAANG stocks is a collective term for the stocks of the world’s leading technology behemoths – Facebook, Amazon,Apple, Netflix, and Google.
How can Indians invest in FAANG stocks?
Under the Liberalised Remittance Scheme (LRS) of RBI, every Indian individual can invest overseas upto $250,000 each year. Indians wanting to invest in FAANG stocks can do so from their broking account if the broking firm offers overseas trading services.
Also, consider the following data of the recent FAANG stock prices at an exchange rate of Rs 75.32.
Facebook : Rs 24,357
Amazon : Rs 255,675
Apple: Rs 10,800
Netflix: Rs 47,100
Google: Rs 212,025
From the above stock prices of FAANG, it is quite evident that the stocks are expensive. To own a share from each company one needs to invest a massive Rs 5.49 lakh. To solve this, some broking firms or trading platforms provide a fractional trading facility where one can buy less than one share as well, which means they can be the shareholder of 0.00001 shares of FAANG.
Otherwise, the second manner to invest in FAANG stocks can be through the mutual fund route to invest overseas. Several fund houses have launched schemes to invest in the foreign markets along with India.
Word of advice for the investors
Investing in the US markets might seem an uphill task but an informed decision backed by proper research can help in doing so. Investing in FAANG stocks can be profitable since the companies are well-established and are safe to invest in. This also goes without saying that one should always assess their risk-appetite level. In addition to this, one must keep a tab on inflation and interest rates, Fed reserve policies and growth rates across geographies since these factors influence the currency movements.