Nippon India bets on the growth story of Taiwan and launches Taiwan Equity Fund. This NFO would open for subscription on 22nd November, 2021. This is an open ended fund following Taiwan focused theme. This fund benchmark is TAIEX index. This index performed well compared to S&P BSE 500 in the last 10+ years. Should you invest in Nippon India Taiwan Equity Fund NFO? What are the risk factors of investing in such international funds?
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Nippon India Taiwan Equity Fund – NFO Details
This is an open-ended mutual fund scheme. This NFO would open for subscription on Monday, 22nd November, 2021 and closes for initial subscription on Monday, 6th December, 2021. Here are the NFO details.
| Scheme Opens | 22-Nov-21 |
| Scheme Closes | 06-Dec-21 |
| Scheme reopens for continuous purchase/sale | 17-Dec-21 |
| Minimum Lumpsum | Rs 500 |
| Minimum SIP | Rs 1,000 for 6 months |
| NAV of the fund | Rs 10 during NFO period |
| Entry Load | Nil |
| Exit Load | 1% if redeemed within 3 months |
| Risk | Very High Risk |
| Benchmark | Taiwan Capitalization Weighted Stock Index (TAIEX) |
| Fund Manager | Ms. Kinjal Desai |
| Max TER | 2.25% |
Download Nippon India Taiwan Equity Fund NFO SID
What is the investment objective of Nippon India Taiwan Equity Fund?
The primary investment objective is to provide long term capital appreciation to investors by primarily investing in equity and equity related securities of companies listed on the recognized stock exchanges of Taiwan and the secondary objective is to generate consistent returns by investing in debt and money market securities of India.
However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.
What is the allocation pattern in this mutual fund scheme?
This fund investment pattern is as follows:
| Type of instruments | Min % | Max % | Risk Profile |
|---|---|---|---|
| Equity and Equity related Instruments listed on the recognized stock exchanges of Taiwan | 80% | 100% | Medium to High |
| Debt and Money Market securities | 0% | 20% | Low to Medium |
Can NRI invest in this MF scheme?
NRIs can invest in this scheme. They can invest on repatriation or non repatriation basis.
How is the performance of Taiwan Capitalization Weighted Stock Index (TAIEX)?
This fund invests in companies that are listed on Taiwan stock exchanges and benchmarked with TAIEX/ Let us check how this index performed compared to S&P BSE 500 in the last 10+ years.
Why to invest in the Nippon India Taiwan Equity Fund?
Here are a few reasons to invest in this fund.
1) This fund invests in stocks that are listed on Taiwan Stock Exchanges. Taiwan has been recognized as a global player in the semiconductor and electronics industry. Taiwan plays a critical role in the entire supply chain. This provides an excellent opportunity for investors to participate in the growth story of Taiwan.
2) TAIEX has performed well in the last 10 years compared to S&P BSE 500 Index (6 out of 11 years in the past). It generated 12.4% average returns compared to S&P BSE 500 Index returns of 12.3%..
Major risk factors you should consider before investing in such funds
One should consider some of these risk factors / negative factors before investing.
1) This underlying fund would invest in companies listed in Taiwan. There is concentration risk. If there is down trend in the growth story of Taiwan and the companies share prices fall, your investment could be at risk.
2) Since it invests outside India, this is classified as an international mutual fund and there are geopolitical risks and currency risks.
3) This fund invests some of the investments in debt instruments of corporates which is high risk.
Are there any Indian mutual funds that invested in Taiwan?
There are no funds that invests only in Taiwan based companies. There are funds that invest part of their portfolio in Taiwan, but not entirely, hence it is not appropriate to compare this fund with them.
Also Read: Should you opt for Smallcase investments?
Should you invest in Nippon India Taiwan Equity Fund NFO?
Nippon India Taiwan Equity Fund is an international fund that invests in companies listed on Taiwan stock exchanges. As indicated above, TAIEX Index has performed well compared to S&P 500 Index companies in the last 10 years. Though this fund benchmarks TAIEX, it does not mean that the returns of the fund replicate the index. Since it is a relatively new fund in this category, we do not know how the performance would be in the medium to long term. High risk investors can invest in this fund.
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Hello.. thanks for the detailed analysis. Can you please give your views on pgim india global select real estate securities fof
NFO which is currently open ? Can we invest in it for long term?
Analysis is on the way
Very helpful.
Can you also share your thoughts around China and Taiwan tensions and its effect on this fund?
Difficult to comment about it 🙂