In a conversation with the TechGraph editorial team, Viram Shah, Co-founder & CEO of Vested Finance, said: “We use global brands such as Nike, Starbucks, and Amazon daily. But, when it comes to investing in them to create wealth, we have been left out.”
He shed further light on his company Vested Finance while delineating major trends in the U.S. market. Here’s an excerpt:
TechGraph (TG): Can you let our audience know more about your role in Vested Finance?
Viram Shah: Sure, I’m the co-founder and CEO of Vested Finance.
TG: What is Vested Finance, and why it is different from others?
Viram Shah: At Vested we provide a simple and cost-efficient solution for Indians to access the US stock market. We started our journey in 2018 with a mission to enable sustainable wealth creation by allowing local investors to go global.
We deeply believe that investors in India deserve better access to global investment opportunities. We use global brands such as Nike, Starbucks, and Amazon daily. But, when it comes to investing in them to create wealth, we have been left out.
We’re the first and only player to offer commission-free direct access to US stocks and ETFs to investors in India. We provide an end-to-end US investing platform that offers:
- Easy-to-read content.
- Paperless onboarding.
- Simplified fund transfers via partnerships with banks and remittance companies.
- Fractional and commission-free investing.
- Advice via our pre-built portfolios called Vests.
- Taxation support in India.
TG: What was the idea behind the launch of Vested Finance and how it all got started?
Viram Shah: Darwin, Eric, and I, three of the co-founders at Vested, were studying at UC Berkeley in the US. All three of us come from different countries – Indonesia, Hong Kong, and India – and we are connected on a common point that our wealth back at home is completely locally concentrated, but in the US, investors have 15% of their portfolio invested in international equities.
Why is there not an easy and cost-effective solution available back at home for us to diversify geographically? That is how it all began.
Over time our vision has evolved – we are now working towards making unique cross-border products available to Indian citizens across the world. Offering a fractional US public market investing product is the first step we have taken towards this vision.
TG: Why Indian investors should invest in U.S. stocks?
Viram Shah: There are multiple reasons why one Indian investor should look at investing in the US stock market:
- Geographic diversification: Currently most of our portfolios are completely locally concentrated. One should have some of their assets diversified geographically to prevent single country exposure in their portfolio.
- Hedge against the INR: When investing in the US markets, one is investing in Dollars. This allows them to protect themselves against the depreciation of the Rupee. 10 years ago the Rupee was at 50 versus the dollar, today it is at 75. If one had invested in the US market 10 years ago, they would have made 50% extra returns because of this change in Rupee value.
- Opportunity to invest in global brands: One can invest in the likes of Facebook, Amazon, Google, Nike, Starbucks. Essentially global companies that are listed on the US exchanges
- Opportunity to invest globally: Via the US markets, one can invest across multiple geographies. There is a variety of ETFs listed on the US markets that invest across the world. For example, the MCHI ETF invests in China or the EWZ ETF invests in Brazil.
TG: What are the risks involved for Indian investors, when they decide to invest in U.S.-listed stock?
Viram Shah: Apart from general market-related risks, the key additional risk that Indian investors are exposed to is FX risk. Since the investments are in USD, this requires converting funds from INR to USD and back to INR when bringing them back.
Additionally, since this is a new market for most investors, there is the possibility of an investor taking an additional risk that they should be taken given their age, income, portfolio size, etc.
There is a wide range of investment products available in the US market and investors should only invest in the products that are suited to their risk capacity.
TG: What makes the U.S. stock market different from the Indian stock market?
Viram Shah: In terms of size the US market is almost 20x of the Indian market. This makes the depth and liquidity of the markets much higher than the local markets.
Additionally, one can invest in companies that are working at the cutting edge of their field and in a lot of emerging sectors such as artificial intelligence or CRISPR.
Lastly, the assets invested in passive funds such as ETFs have crossed the assets invested in active funds such as mutual funds. This means that investing via ETFs is a better way of investing in the US markets versus the mutual fund way of investing in the Indian market.
TG: Where does Vested Finance stand on the profitability metric?
Viram Shah: We typically do not disclose our financials publicly. However, we are well-funded and are backed by a diverse group of investors from China, India, Singapore, and the US.
From India, the founders of RazorPay – Harshil Mathur and Shashank Kumar and the CEO of BharatPe – Ashneer Grover along with the CFO of BookMyShow – Mitesh Shah, have invested in us.
TG: Is there any plan to enter new vertices too?
Viram Shah: We will expand our product suite over time. As I mentioned earlier, the goal for us is to offer unique cross-border products to our users.
Currently, we offer access to the U.S. public markets. There are other alternative asset classes that we can offer as well. These are all products that we as Indians have never had access to, and we at Vested are excited to open up new investment avenues.
TG: What is the roadmap for Vested Finance going forward?
Viram Shah: Lots of exciting things coming up! On the current product, we will consistently keep making improvements. One of the biggest bottlenecks in the U.S. investing journey currently is the fund transfer process. That needs to be improved.
Further, on the platform, we want to offer a mixture of brokerage as well as advisory. Our first advisory product was Vests. These are pre-built portfolios that allow investors to build portfolios beyond FAANG.
We will keep expanding the advisory products as well. Lastly, there are some interesting partnerships that we will be launching in the next couple of months.
