FAANG is still favourite but Indian investors also playing global pharma theme: Viram Shah of Vested Finance

For Indian investors, FAANG could still be the favourite where Apple and Amazon are the two top companies where Indians are betting their money, but pharma as a theme is also catching up, thanks to news about the release of new vaccine, Viram Shah, CEO and Co-Founder at Vested Finance said in an interview with Moneycontrol’s Kshitij Anand.

For Pfizer, we saw an 80% spike in total dollar value invested in Pfizer post their recent vaccine announcement and a similar trend was observed in Moderna as well whenever there was positive news around their vaccine, he added.

Edited excerpts:

Q) The news about the launch of COVID vaccine indeed strengthens the bullish sentiment across the globe. But, what does the data suggest – do you see Indian investors betting on pharma stocks more than let’s say FAANG?

A) We do see heightened interest in pharma stocks post-vaccine announcements. You can clearly see the trend in the below charts. We looked at investments made on Vested in Pfizer and Moderna, two companies that are actively working on vaccines.

For Pfizer we saw an 80% spike in total dollar value invested in Pfizer post their recent vaccine announcement. A similar trend was observed in Moderna as well whenever there was positive news around their vaccine.

However, when compared to FAANG, investments in pharma companies are much lesser. FAANG continue to be Indian investor favourites.

Q) What is the kind of money (Indian) riding on pharma space amid the news of COVID vaccine? What does history suggest if we compare the numbers with last year?

A) The overall investment in the pharma space ranges between 5% and 7% of the total investments made by Indians in the global markets.

The technology sector and index ETFs continue to command the largest allocation within international portfolios. Some companies apart from FAANG that are popular among investors include Tesla, Salesforce, and Shopify.

Q) After the US Presidential elections - what is the trend you have noticed with respect to investors putting money in US markets? Earlier many would have been on the sidelines to see a clear direction where the event is headed?

A) You are correct. Investments slowed down in October because of the uncertainty around the US elections. Now, that the elections are out of the way, investments have picked up again.

We are seeing both existing investors continue to invest as well as new investors start their journey with us. Another thing that changed in October was the introduction of the 5% Tax Collection at Source for money transferred under LRS, however, investors have taken that in their stride and volumes are back at pre-TCS levels.

Q) What is traction you are seeing on FAANG stocks?

A) FAANG continues to be the investor’s first choice. Not just Indian investors but all across the world in a time when investors have cash and are looking for yield, the large technology companies have become a safe haven of sorts for investors.

The new US president Biden has spoken about the need for additional regulations on these technology companies that is something that investors should monitor.

As far as our platform goes, Apple and Amazon are the two top companies among the FAANG stocks.

Q) What should be the strategy for investors for 2021?

A) There are two main things to keep in mind: 1) Focus on the long-term and 2) Invest in ETFs as much as possible. On the first point, one should avoid making instinctive changes to their portfolio based on the news.

Focus on the value that companies will create over the long-term rather than trying to maximize profits in the short-run. On the second point, unless you are actively studying companies, it becomes difficult to time the market in terms of entry and exit points in particular companies.

The US markets have so many ETFs that allow you to invest in an easy manner. Look at taking advantage of these ETFs to build your portfolio. For example, one can create a portfolio by investing across equity, bond and gold ETFs.

The % allocation will vary based on the individual’s risk-taking capacity. But keep it simple as far as possible