Do you want to invest in Top 50 stocks from S&P 500 index? 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 Top 50 Stocks from S&P 500 index. Investors would get opportunity to invest in top 50 mega companies in US by investing in this mutual fund scheme. This index has outstanding performance and delivered 7.8x returns compared to 2.8x returns in NIFTY50 in the last 10 years. Mirae Asset S&P 500 Top 50 ETF Fund of Fund would open for subscription on 1st September 2021. Should you invest in Mirae Asset S&P 500 Top 50 ETF Fund of Fund NFO? What are the various risk factors associated with such global funds?
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Mirae Asset S&P 500 Top 50 ETF Fund of Fund – NFO issue details
This is an open-ended equity mutual fund scheme. Here are the NFO issue details.
| Scheme Opens | 01-Sep-21 |
| Scheme Closes | 15-Sep-21 |
| Scheme reopens for continuous purchase/sale | 23-Sep-21 |
| Minimum Lumpsum | Rs 5,000 |
| Minimum SIP | Rs 1,000 for 6 months |
| NAV of the fund | Rs 10 during NFO period |
| Entry Load | Nil |
| Exit Load | If redeemed < 3 months – 0.5% |
| Risk | Very High Risk |
| Benchmark | S&P 500 TOP 50 TRI (INR) |
Download Mirae Asset S&P 500 Top 50 ETF Fund of Fund SID
What is the investment objective of this MF scheme?
The investment objective of the scheme is to provide long-term capital appreciation from a portfolio investing predominantly in units of Mirae Asset S&P 500 Top 50 ETF.
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 S&P 500 Top 50 ETF | 95% | 100% | High |
| Money market instruments / debt securities, Instruments and/or units of debt/liquid schemes of domestic mutual Funds | 0% | 5% | Low to Medium |
What companies are part of S&P 500 Top 50 Index?
Here is the list of top 15 stocks which are part of this index and the sector weightage of the index.
1) Apple
2) Microsoft
3) Amazon
4) Facebook Inc Class A
5) Alphabet Inc Class A
6) Alphabet Inc Class C
7) Tesla Inc
8) Berkshire Hathway Inc
9) Nvidia Corp
10) JP Morgan Chase
11) Johnson and Johnson
12) Visa Inc Class A
13) United Health Group
14) Home Depot
15) Procter and Gamble
Why to invest in the Mirae Asset S&P 500 Top 50 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 S&P 500 Top 50 index. S&P. This index contains Top 50 blue chip companies. Such blue-chip stocks have always rewarded the investors with good returns in the medium to long term.
2) This fund invests in S&P 500 Top 50 Index which includes large companies like Apple, Microsoft, Amazon, Tesla etc. which is sector agnostic portfolio. There are over 47,919 companies listed across the globe, however top 50 companies contribute to 21%.
3) This S&P 500 Top 50 index has outperformed in the last 10 years. This index delivered 7.8x returns in the last 10 years compared to NIFTY50 returns of 3x. Means your investment of Rs 1 lakh would have turned to Rs 7.8 Lakhs in this index Vs Rs 3 Lakhs in NIFTY50 in the last 10 years.
4) This portfolio index of top 50 companies changes in line with market conditions. Hence investors need not make the portfolio changes on their own.
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 S&P 500 Top 50 Index. There are instances (2015 or 2016 or 2021) where this index has underperformed NIFTY50.
2) This fund invests in S&P 500 Top 50 index companies. Investments in overseas countries would have various risks like 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 (SID).
Performance of underlying ETFs / Index Funds
Let us see the performance between S&P 500 Top 50 index Vs S&P 500 index vs Nifty50 index.
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Should you invest in the Mirae Asset S&P 500 Top 50 ETF Fund of Fund NFO?
Mirae Asset S&P 500 Top 50 ETF Fund of Fund invests in ETF that would invest in S&P 500 Top 50 Index. This S&P 500 Top 50 Index has outperformed and generated 22.6% annualized returns in last 10 years compared to 12.5% annualized returns from Nifty50. Even in the medium term of 5 years, the index outperformed and generated 22% annualized returns compared to NIFTY50 returns of 14%. Mutual fund investors should always invest some portion in international mutual funds. This acts like diversification along with getting international exposure to their portfolio. High risk investors can invest in this fund for medium to long term of 5-10 years.
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is it better to have such scheme / fund in one portfolio from diversification purposes.
How is S&P 500 top 50 performance against Nasdaq 100?
what will be the expense ratio for this FoF?
i too have the same question
legends for the sector pie chart is missing
Thanks for letting us know about this option. Motilal Oswal is also having S&P 500 fund. May be you should mention that option as well in article. I am already invested in Motilal Oswal s&p 500 fund.
Thanks Zubin. There are plenty of such schemes for each AMC, hence not possible to indicate everything in an article.