Saturday, February 24

Navi Nasdaq 100 Fund of Fund launched – Check expense ratio and how to invest in top US stocks from India

Nasdaq 100 Index has historically had low correlation with Indian indices, providing higher diversification benefits to Indian investors.

Navi Mutual Fund has launched its Navi Nasdaq 100 Fund of Fund, an open-ended equity scheme that will invest in units of overseas ETFs or Index Funds based on the Nasdaq 100 Index. The NFO opened on 3rd March 2022 and will close on 17th March 2022. Investors can invest through online platforms like Groww, PaytmMoney, Zerodha Coin, INDMoney, Kotak Cherry, MF Utilities and more.

Nasdaq 100 is currently down by almost 19 per cent year-to-date. Long term investors may consider diversifying their domestic portfolio by investing in US stocks with some exposure in tech-heavy Nasdaq 100.

The Nasdaq 100 index since its inception in 1985 is a large-cap growth index and includes 100 of the top domestic and international non-financial companies based on market capitalization. The Index reflects companies across major industry groups, including computer hardware and software, telecommunications, retail trade and biotechnology. Noticeably, what it does not include are the stocks of banks and financial companies, including investment companies.

Some of the world’s most innovative companies like Apple, Microsoft, Starbucks, Google, Intel, and Tesla are listed on Nasdaq-100. What are known as the FAANG stocks — Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (GOOGL) — representing substantial market cap, are the top 5 stocks in the Nasdaq 100 index.

The new fund provides an opportunity for investors to invest in the leading technology giants of the world in a simple, affordable and low-cost manner. The fund will have a total expense ratio of 0.13 per cent for the direct plan, which according to the fund house, is among the lowest in the category.

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Nasdaq 100 index comprises 100 of the largest non-financial companies listed in the US. With a market cap of $18 Trillion, the index has grown approximately 6x over the last 10 years. The technology-heavy Nasdaq 100 Index has outperformed more than 90% of all large cap US funds over 1, 3, 5 and 10 years. It has also outperformed S&P 500 in 11 of the last 13 years. The index provides global exposure as well, since many non-US companies such as Baidu (China), Atlassian (Australia), ASML holdings (Netherlands) etc. are also part of it.

In addition to the above, investing in the Navi Nasdaq 100 FoF will provide investors diversification and currency hedge benefits. Nasdaq 100 Index has historically had low correlation with Indian indices, providing higher diversification benefits to Indian investors. Investors can also potentially benefit from better returns if the USD appreciates against INR. Nasdaq 100 (USD) had a 20-year annualized return of 12.93% from 31 Jan 2002 to 31 Jan 2022 whereas Nasdaq 100 (INR) returned 15.39%, due to the USD appreciating 2.16% against INR.

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