Mirae Asset NYSE FANG+ ETF Fund of Fund NFO – Review
Do you want to invest in Top 10 US gaint stocks containing Google, Facebook, Twitter, Amazon, Tesla? Currently there are mutual funds in India which would either invest in few stocks in US stock market or in NASDAQ 100 Index. Mirae Asset has launched a new ETF and Fund of Fund (FoF) which would invest in FANG+ Index. Investors would get opportunity to invest in Facebook, Apple, Amazon, Netflix and Alphabets Google etc. by investing in this mutual fund scheme. Mirae Asset NYSE FANG+ ETF Fund of Fund would open for subscription on 19th April, 2021. Should you invest in Mirae Asset NYSE FANG+ ETF Fund of Fund NFO? What are the various risk factors associated with such funds?
Also Read: 5 Midcap Multibaggers that grown 1 Lakh upto 7.3 Lakhs in 1 year
Mirae Asset NYSE FANG+ ETF Fund of Fund NFO Details
This is an open-ended equity mutual fund scheme. Here are the NFO issue details.
|Scheme reopens for continuous purchase/sale||11-May-21|
|Minimum Lumpsum||Rs 5000|
|Minimum SIP||Rs 5000 for 6 months|
|NAV of the fund||Rs 10 during NFO period|
|Exit Load||< 90 days – 0.5%
> 90 days – Nil
|Max expense Ratio (TER)||1.00%|
|Benchmark||NYSE FANG+ Total Return Index (TRI) (INR)|
Download Mirae Asset NYSE FANG+ ETF Fund of Fund SID
What is the investment objective of Mirae Asset NYSE FANG+ ETF Fund of Fund NFO?
The investment objective of the scheme is to provide long-term capital appreciation from a portfolio investing predominantly in units of Mirae Asset NYSE FANG+ ETF. The underlying ETF would invest in NYSE FANG+ Index.
There is no assurance or guarantee that the investment objective of the scheme will be realized.
What is the allocation pattern in this mutual fund?
This fund investment pattern is as follows:
|Type of instruments||Min %||Max %||Risk Profile|
|Units of Mirae Asset NYSE FANG+ ETF||95%||100%||High|
|Money market instruments / debt securities, Instruments
and/or units of debt/liquid schemes of domestic Mutual
|0%||5%||Low to Medium|
What does NYSE FANG+ Index contain?
Here are the list of stocks which are part of this index.
5) Alphabet Google
Why to invest in the Mirae Asset NYSE FANG+ ETF Fund of Fund NFO?
Here are a few reasons to invest in such mutual fund schemes.
1) This fund would invest in ETF that would invest in overseas NYSE FANG+ Index. NYSE FANG+ Index is relatively new that was formed in 2017. This index has outperformed in the last 3.5 years and moved from 2,000 index points to 6,500+ points. In the last 1 year, this index generated 130% returns.
2) This fund invests in NYSE FANG+ Index which includes 5 core FANG stocks like Facebook, Amazon, Apple, Netflix, Alphabet Google and 5 other high growth technology stocks. These 10 stocks are highly traded growth stocks of next generation technology and tech-enabled companies. Investors can get opportunity to invest in these companies.
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) This fund would invest in ETF that invests in NYSE FANG+ Index. This index is relatively new i.e. formed only in 2017. In medium to long term, we do not know how such index would be performed.
2) This fund invests in the NYSE FANG+ index companies. Investments in overseas countries would have currency risk and geopolitical risks.
3) It invests some part in debt instruments which are turned to be high risk these days.
4) You can refer complete risk factors in NFO Scheme Information Document.
Performance of underlying ETFs / Index Funds
NYSE FANG+ index was formed in 2017, the data from 2014 to 2017 is back tested index calculations. Here is the performance of the underlying index.
1) 1 Year returns – 132%
2) Annualized returns since 2014 – 34%
You may like: Top Performing Funds in last 15 years
Mirae Asset NYSE FANG+ ETF Fund of Fund NFO – Should you invest?
Mirae Asset NYSE FANG+ ETF Fund of Fund invests in ETF that would invest in NYSE FANG+ Index. Earlier, I have recommended a few times to invest in Motilal Oswal NASDAQ ETF that outperformed in the last 5-10 years. This NYSE FANG+ Index too outperformed and generated 32% annualized returns in last 7 years compared to NASDAQ 100 which generated 12.5% annualized returns. While this new fund is good, this is high risk fund considering the short term performance + overseas investment. If you are high risk investor, you can invest in this new fund for 5-10 years time frame. Moderate to low risk investors should avoid such funds.
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Can u give a comparison between investing in motilal Oswal nasdaq 100 ETF vs Motilal Oswal nasdaq FOF direct
Hello Suresh garu,
Is it advisable to invest in this NFO or is it better to already invest in an existing fund from another house which has the same FANG+ investment philosophy?
Any advantages / disadvantages either way?
Hello Siva, Currently there are funds that invests in US stocks / NASDAQ 100 index etc., There is no fund that invests in FANG+. We could see growth in such funds (history talks). I would personally like to invest in such funds along with NASDAQ 100 index also (diversify between these two)
where we can invest money in safe instrument where we can get 9% to 10% yearly return.
Rohan, If this option would have been available, I would have been the first person to invest. One can expect 10% to 12% returns in equity and mutual funds but that comes with risk. There are zero safe instruments that provide 10% returns.
Hi Suresh Sir,
Good article, informative…..thank you..
Regarding taxation, what about the tax if we invest from our NRE accounts directly and i am being a NRE account holder / working abroad , currently not in any tax brackets. If i invest in overseas funds, how would be tax calculated. So far i haven’t paid any taxes and not under tax regime.
Hello Pushpan, This is international mutual fund and returns from such fund would be taxed like debt funds (< 3 years STCG and > 3 years LTCG). Since your query is NRE, this is little complicated as there are several rules and guidelines for NRE accounts. Refer this link. https://groww.in/p/nre-account/ which has some insights to it
Q – How they will be taxed ?
Q – Are these funds are subject to tax in US also?
Taxation on international mutual funds would be based on tenure
1) Short Term Capital Gain (STCG): If you redeem this fund within three years, then it is termed as Short Term Capital Gains. These gains are added to your income and are taxed according to the tax bracket you fall in.
2) Long Term Capital Gain (LTCG): If you invest for 3+ years, then your returns are classified as Long Term Capital Gain (LTCG). Such gains are taxed at the rate of 20% percent after indexation.
Regd capital gains taxation in US, yes, these would be taxed as per US tax laws.