Investing has always been an inconvenient, long process for Non-resident Indians (NRIs). The process is complex and tiring, riddled with issues related to a complicated series of regulations and transactional compliances.
Even for a finance professional, expert guidance may be required to manage multiple accounts in India and the US and handling complex tax rules. The entire work is cumbersome and difficult to do, and those who try to do it without expert guidance face multiple hurdles along the way.
To tackle this issue, a Boston-based fintech company called Hemista (Hemista – Personalized Investment Portfolio for NRIs) has built a tailor-made product for NRIs. Hemista is responsible for creating a personalized investment portfolio with exposure to the US and Indian markets. It works on the proprietary Cross-Border Robo Advisor Algorithm.
The portfolio allocation considers other factors — such as significant importance to children’s education — that are unique to the NRIs.
Opening an investment account through Hemista takes only a few minutes. Such an account has tax liability only in the US for the gains arising from this account. Even if you move back to India, you can also maintain your Hemista account from there.
“The expat community’s requirements are unique, and that requires a product tailor-made to their needs,” Gurumoorthi G, founder of Hemista, was quoted as saying. “Immigrants are usually not familiar with the financial landscape in the US and also have a propensity to invest in their native country. Most US-based NRIs are tech-savvy, and we believe that a digital product like Hemista will be ideal for them.”
Hemista incorporates assets with low correlation in its portfolio to achieve superior risk-adjusted returns and refrain from diversification for the sake of covering all possible asset classes. For example, Hemista does not see any meaningful value-added when European equities are added to US equities. Both of these asset classes have a similar risk profile and are highly correlated. However, a combination of US and Indian market assets is less correlated and might yield superior risk-adjusted returns.
Hemista reviews the portfolio annually for rebalancing or if the portfolio allocation to a particular asset class exceeds its threshold.
Even if the NRIs move back to India, they can continue to maintain their Hemista account.
“For years there has really been no innovation in this space, and NRI investment products have revolved around NRE accounts/deposits and certain mutual funds accessible to NRIs. Hemista’s vision is to be the game-changer in the NRI investing space,” Gurumoorthi G said.