"Many parents want their children to study in the US. But by the time the child grows up, the investments they've made in India may not be sufficient to meet the education expenses due to currency fluctuations. In such a scenario, ETFs in the US market offer a better option to save for children's education in the United States,” says Amitabh Srivastava, co-founder of Zambala.
Apart from the option of investing in US stocks, the app also allows one to participate in the Indian equity market. Buying stocks in marquee domestic companies
such as HDFC Bank, Reliance Industries, Infosys, Tata Consultancy Services, Hindustan Unilever, IndusInd Bank and Kotak Mahindra Bank (HRITIK) is also possible.
“We have brought all the stakeholders under one platform. The moment market experts come out with their recommendations, they release it on our app for our users," Srivastava says.
The app, which is currently available on the platforms of four brokerage firms -- Zerodha, Phillip Capital, Arcadia Stocks and RKSV Securities -- doesn't charge anything from investors. "We are an AI-powered marketplace and want to make investments a hassle-free experience for retail investors," says Achal Darbari, another co-founder of the Pune-based startup.
Like Zambala, there are many other fintech startups working in the equity trading space, and are disrupting the traditional brokerage model in a big way.
Apart from introducing various technology-enabled features, these platforms are also enabling first-time retail investors to put money in equity assets based on their risk appetite.
For instance, Bengaluru-based firm, Smallcase, has come up with all-weather investing concept that offers retail investors a bouquet of stocks to invest. This not only diversifies the investor's portfolio, but also provides cushion against down side risks.
"With Smallcase, an investor can take portfolio exposure to equities without incurring a high expense ratio or carrying out his own research," says Vasanth Kamath, co-founder of the startup.
As a retail investor doesn't have the time and expertise to do thorough research before picking a stock, Smallcase offers a bouquet of stocks based on the risk taking ability of an individual. Currently, no traditional brokerage firm offers basket of stocks to invest in. So, the first advantage for an investor is to diversify his portfolio with cushion against the downside risk.
Secondly, the startup offers products based on an idea or theme. For instance, if you want to invest on companies
whose share price will go up in case of rising rural demand, then Smallcase offers you such a product. Apart from this, the startup also allows an investor to change the weightage of a company depending on its performance, says Kamath.
Founded in 2015 by three IIT-Kharagpur graduates -- Anugrah Shrivastava, Vasanth Kamath and Rohan Gupta -- the theme-based asset allocation strategy of Smallcase is slowly catching up in India. The company claims it has over 180,000 active users on its platform across brokers. It is currently available in the trading platforms of Zerodha and Axis Direct, among others.
Apart from startups like Smallcase and Zambala, firms like Streak and Sensibull are also changing the terms of the trade in the Indian equity trading space, for the better.