BNP Paribas Global Innovative Technology Fund NFO Review
BNP Paribas Mutual Funds came up with a new mutual fund scheme, BNP Paribas Global Innovative Technology Fund, which is Fund of Fund (FOF) and invests in existing Parvest Disruptive Technology Fund, Luxembourg. This fund would open for subscription on 16th August, 2019 and would be there till 30th August, 2019. What are the features of BNP Paribas Global Innovative Technology Fund NFO? How does the underlying Parvest Disruptive Technology Fund has performed in the last few years? Should you invest in BNP Paribas Global Innovative Technology New Fund Offer (NFO) or not?
Features of BNP Paribas Global Innovative Technology Fund NFO
This is an open-ended equity fund, which is Fund of Fund (FOF) i.e. this would invest in other mutual fund scheme. This fund invests in existing Parvest Disruptive Technology Fund from Luxembourg.
This scheme would open for subscription on 16th August, 2019.
This scheme would close for subscription on 30th August, 2019.
Since this is an open ended scheme, it would again open for subscription after 5 business days from the date of allotment of Mf units after the NFO period.
This scheme is available in both regular and direct plans.
This plan offers both growth option and dividend option.
This scheme is available for lump sum and SIP investment.
Minimum investment is Rs 5,000 and in multiples of Rs 1,000 there-off for lump sum investments.
Minimum investment is Rs 300 per month for monthly SIP and for a tenure of 20 months.
The NAV of the NFO is Rs 10 per unit now during initial subscription.
There is no entry load to invest in this mutual fund scheme.
There is an exit load of 1% if the mutual fund units are redeemed before 365 days.
This scheme is classified as HIGH risk scheme.
Scheme total expense ratio (TER) is estimated 0.81% of the total assets on any day.
What is the investment objective and strategy of this BNP Paribas Global Innovative Technology Fund NFO?
The investment objective of the mutual fund scheme is to get capital appreciation by investing majorly in the units of Parvest Disruptive Technology Fund. However, there can be no guarantee that the investment objectives of the Scheme will be realized. The Scheme does not guarantee any returns.
Who can invest in this mutual fund scheme?
Any of the following can invest in this scheme in this scheme.
1) Resident Individuals
2) Resident Indian Nationals, including partnership forms, companies, Banks, HUFs, Sole Proprietorship etc.,
4) Foreign Portfolio Investors
Who is the Fund Manager of BNP Paribas Global Innovative Technology Fund NFO?
The Fund Managers are Mr. Abhijeet Dey & Mr. Karthikraj Lakshmanan.
What is the benchmark for this scheme?
The benchmark for this scheme is the MSCI World Index (Total Return Index).
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern is as follows:
1) It invests 95% to 100% in the units of Parvest Disruptive Technology Fund, Luxembourg. The risk profile in this segment is high.
2) It invests 0% to 5% in money market instruments. This risk profile in this segment is low.
Can NRI invest in this MF scheme?
Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.
How is the Performance of BNP Paribas Parvest Disruptive Technology Fund?
Since this new mutual fund scheme invests in underlying units of existing Parvest Disruptive Technology fund, let us look at the performance of this fund.
1) BNP Paribas Parvest Disruptive Technology Fund was launched in 2013 in Luxembourg. This fund size as of end of Jun, 2019 is Euro 727 Millions.
2) This fund invested majorly 57% in IT, 11% in Industrials, 8% in Healthcare, 7% in communications etc.,
3) This fund currently invests in 64 holdings, which includes Microsoft Corp, Visa Inc, Apple Inc, Alphabet, Amazon, Euro, First Solar, SAP etc.,
4) This fund has outperformed and gave 23% annualized returns in the last 3 years against benchmark returns of 18.8%. This fund gave 26.3% annualized returns from inception against 17.4% returns from the benchmark.
5) Morningstar has rated this fund as 4 stars (4 out of 5) which is good rating.
Why to invest in BNP Paribas Global Innovative Technology Fund?
Here are a few reasons to invest in this fund.
1) This fund invests majorly in existing Parvest Disruptive Technology Fund, Luxembourg which in turn invests in top technology stocks across globe. It has no major investments in India, hence it can be termed as Global or International Mutual Fund. Investing in international funds has always rewarded investors provided they invest based on the trending theme across globe.
2) This fund invests in underlying units of Parvest Disruptive Technology Fund that has outperformed in the last 3 to 5 years and gave 23% to 26% annualized returns.
3) Since it invests in existing mutual fund units of another fund, the fund management fees are lower at 0.81%. This would help investors get higher returns.
Some key risk factors you should consider before you invest in such funds
One should consider some of these risk factors / negative factors before investing.
1) Its underlying mutual fund invests more than 95% in equity and related instruments of technology business which is high risk.
2) The underlying mutual fund invests in companies outside India and across the globe. Any global and political factors in that country can influence the performance of the company and can impact mutual fund scheme returns.
3) This fund invests up to 5% in money market instruments which has turned as high risk in India post several scams in the last 6 to 9 months.
How is the Performance of Existing International Mutual Funds?
Currently there are several international / global mutual funds, let us look at the performance.
1) Motilal Oswal NASDAQ 100 ETF: This fund has outperformed and gave 18% annualized returns in the last 5 years and 20% annualized returns in the last 3 years.
2) Franklin India Feeder US Opps Fund: This fund gave 14% annualized returns in the last 5 years and 17% annualized returns in the last 3 years.
3) ICICI Pru US Blue Chip Equity Fund: This fund gave 12% annualized returns in the last 5 years and 13% annualized returns in the last 3 years.
Means the performance of these top 3 international mutual funds is on the lower side compared to Parvest Disruptive Technology Fund Performance.
You may like: Best Balanced Mutual Funds to invest through SIP
Should you invest in the BNP Paribas Global Innovative Technology Fund NFO?
BNP Paribas Global Innovative Technology Fund is Fund of Fund (FOF) that invests in existing BNP Paribas Parvest Disruptive Technology Fund of Luxembourg. This existing fund from Luxembourg has outperformed the performance compared to other global / International mutual funds. While the fund performance is not guaranteed in the future, its stock picking strategy (30-40 stocks) across the globe was successful in the last 5 years. I would personally like to invest some of my mutual fund portfolio in these mutual fund schemes.
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