It is not FAANG but Tesla that is widely held stock among Indian investors: Prateek Jain of Winvesta

FAANG stocks do occur within the top names of Winvesta's AUM, but investors are looking at other stocks too. In fact, the most held stock on the platform is not a FAANG name but is Tesla, Prateek Jain, Co Founder & President, Winvesta – said in an interview with Zeebiz’s Kshitij Anand.

Before Winvesta, Prateek worked with Deutsche Bank for 11 years, across Singapore and New York. He ran the global energy trading book for Deutsche, building several new businesses and revenue streams.

Edited Excerpts:

Q) What a year it has been for the Indian equity markets, especially when it comes to investing in international equities. How do you sum up the trend in 2021?

A) The trend has definitely been on the positive side. More Indians are looking for access to foreign equities and that is a good sign.

For the year, the S&P 500 outperformed India's benchmark Nifty 50 index, gaining 26 per cent, as compared to the 22% in the Nifty50 in 2021.

More Indians have managed to invest in the US equity markets. This is evident from the fact that for Winvesta as a platform, the Assets Under Management (AUM) has grown 300% over the last 12 months.

If I have to sum up the US equity market trend in 2021, it would be the ‘rise of the retail investor’.

Q) What should be the strategy of investors amid a potential rise in interest rates by US Fed in 2022?

A) The US Federal Reserve hinted that it may raise interest rates at least thrice in 2022. It also announced a reduction in its bond-buying program.

The prospects of a potential withdrawal of easy money were evident from the fact that the so-called growth stocks like Square, Affirm, among others, saw a correction once the announcement was made.

These growth stocks have given way to value names. The trend is likely to be similar in 2022, with interest rates on the rise, money is likely to shift back from growth stocks to value names.

Q) What is the kind of money riding on different markets?

A) As of September 14, the total market capitalization of the US equity market rose 19% year-to-date to $51 trillion. The next biggest market was China at $12.4 trillion, followed by Japan ($7.43T), Hong Kong ($6.52T), and the UK ($3.68T). The Indian stock markets are now the sixth-largest in the world with a $3.4 trillion market cap.

Q) What is the trend that you see from India – ETFs or stocks? What does the trend suggest for the year 2021?

A) The trend in 2021 has largely been more towards stocks as compared to ETFs. For Winvesta, ETFs formed 13-14% of our AUM in 2021.

If the markets consolidate more in 2022, long-term investors may consider a shift towards ETFs and that number may see a rise.

Q) Which are the new stocks apart from FAANG, which Indian investors are putting their money into?

A) Yes, the FAANG stocks do occur within the top names of Winvesta's AUM, but investors are looking at other stocks too. In fact, the most held stock on the platform is not a FAANG name but is Tesla.

Other names where investors are looking to put money to work are AMD, Airbnb, Freshworks, new EV names like Rivian and Lucid, Palantir, and Riot Blockchain, among others.

Q) What is the kind of IPOs/new companies that are likely to hit US markets in 2022?

A) 2021 has been a record year for IPOs in the US, even for companies that went public through the SPAC route. Multiple companies are lined up to go public in 2022 as well.

One of the major ones is Reddit, which created a stir through the meme stock mania at the start of 2021. That company has confidentially filed for an IPO.

Other names include The Fresh Market, which went private in 2016 and is looking to have another shot as a public company.

Others include Discord, which offers instant messaging, video and voice calls on gaming platforms, Databricks, Ascensus, Instacart, ThoughtSpot, and Stripe.

Q) Any new products, which you plan to start or have started recently?

A) Recently, Winvesta became the first platform in India to launch Global Multi-Currency Accounts for Indians. The Multi-Currency Account (MCA) allows users to save, transact, and invest in over 35 currencies, including the US Dollar, the British Pound, and the Euro.

The MCA has become a platform to make overseas investing smoother and also enables the user to save a large number of transaction costs which was not possible earlier. Till date, Winvesta remains the only company in India to do so.

In late November, Winvesta also became the first company to launch a UPI feature for global remittances. The feature helps clients based in India to remit funds via UPI and net banking to fund their global investment accounts.

This was done in collaboration with our partners under the RBI's regulatory cohort. Apart from the ease of transaction, the process also cuts down on the fixed fees to Rs 0 from Rs 2,500 that the Indians otherwise paid for such fund transfers.

Q) What is the trend that you see for sectors like EV, tech as well as blockchain? What is the kind of money that is rising in these sectors? And, any top companies?

A) The EV-related companies are here to stay, as evident from the traction seen in IPOs like Rivian and the price action seen post that.

However, it will also boil down to how they are able to execute the promises that they have made and how things shape upon the ground. Investor interest is palpable in these stocks as Rivian and Lucid feature among the few stocks beyond FAANG where investors on Winvesta's platform have put money to work.

The same goes for blockchain as its adoption increases globally. However, such kinds of stocks may face some pressure in 2022 as interest rates rise and money moves back into value-oriented names.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)