Mirae Asset NYSE FANG+ ETF – Whether you Should Invest?

Mirae Asset Investment Managers (India) is part of “Mirae Asset Financial Group” headquartered in Seoul, South Korea. Mirae asset was founded in 1997. The group is offering asset management, wealth management, and insurance services in more than 40 countries.

Mirae Asset Investment Managers (India) is offering asset management service in India through 21 branches and has approximately assets of Rs. 71000 cr under management. Some of the schemes like Mirae asset Emerging Bluechip fund, Mirae asset large-cap fund, Mirae asset tax saver fund has delivered good returns in recent years.  


 

About the offering

Mirae asset Investment managers have launched “NYSE FANG+ ETF” intending to invest in the NYSE FANG+ index. Further Mirae asset is also offering “NYSE FANG+ ETF Fund of Fund” which shall be investing in the NYSE FANG+ ETF. 

For those who are not able to understand, to invest via ETF option one needs to have a Demat account and hence those who want to invest without a Demat account may invest through a second option which is Fund of Fund (FOF). Investing through FOF is like normal mutual fund investing.

The details of the scheme as under:

 

Mirae Asset NYSE FANG+ ETF

Mirae Asset NYSE FANG+ ETF Fund of Fund

Scheme

An open-ended passive scheme investing in stocks in the NYSE FANG+ index in the same proportion

An open-ended FOF investing in NYSE FANG+ ETF

Objective

The investment objective of the scheme is to generate returns, before expenses, that are commensurate with the performance of the NYSE FANG+ Total Return Index, subject to tracking error and forex movement. The Scheme does not guarantee or assure any returns.

Fund Manager

Mr Siddharth Srivastava

Ms. Ekta Gala

Minimum Investment

Rs. 5000 and multiples of Rs. 1/- thereafter

Rs. 5000 and multiples of Rs. 1/- thereafter

Listing

National Stock Exchange and Bombay Stock Exchange

NA

Plan

NA

Regular Growth Plan and Direct Growth Plan

Expense Ratio

0.33%

Direct Plan- 0.50%

Regular Plan- 1.00%

Offer Closes on

30.04.2021

03.05.2021

Allotment Date

06.05.2021

10.05.2021

 

What are FANG+ Stocks?

The scheme shall be investing in NYSE’s (New York Stock Exchange) FANG plus index. The FANG is the term used for dominant US technology companies Facebook, Amazon, Netflix & Google. The FANG+ index includes Apple, Tesla, Baidu, Alibaba, Nvidia & Twitter. The companies in the index are some of the most innovative companies and have dominated the world for a long.

The services of these companies are used by people across the world. These companies generate high profits and have high corporate governance standards. The stocks of these companies have delivered good returns in the recent period. The stock price of Tesla has grown 15 times in the past five years.

The FANG+ index has delivered a Compound annual growth rate of 46.80%, 42.80%, 105.63% return in 5 years, 3 years, and 1-year time frame. The index has outperformed all other major US indices.

Mr. Sidharth Srivastava while discussing the objectives of the scheme informed

Mirae Asset NYSE FANG+ ETF and Fund of Fund will provide investors the option to take focused and equal-weighted exposure in the 10 high growth innovative technology companies which are at the forefront of several megatrends. Through these offerings, an investor can take low-cost exposure in global markets and participate in the growth story of these companies.


Whether you should invest?

It is generally not recommended for investing in any fund at the time of the “New Fund offer” due to higher costs involved in the initial stages of the launching of a fund. The investor may consider investing in the fund in due course.

In respect of investment in NYSE FANG+ ETF, you may consider following before investing.

Suitable for

The fund is suitable for the following categories of investors.

Aggressive Investors

The fund invests in 10 stocks only and poses concentration risk. Further being a thematic fund it is riskier than the focused funds. The FANG+ companies operate across the globe and are subject to different regulatory environments. Any change in regulations may impact the business of the companies.

However because companies in the FANG+ index are one of the most innovative and dominant companies, they may outperform the other listed companies.

The aggressive investors looking for higher returns may invest in the scheme. The allocation to the scheme shall not be more than 5% of the overall portfolio. Further, the investors interested in investing in a concentrated portfolio of global leaders and future technology disruptors may invest in the scheme.

Investors looking to Diversify

The investors who want to diversify their investment geographically may consider investing in the scheme. However, considering the concentrated nature of the scheme, the investors may add another international mutual fund scheme investing on larger indexes like S&P 500 or Nasdaq 100.

Long Investment Horizon

The investors shall invest with a long-term horizon of a minimum of seven years. Those who want to invest in a shorter time frame shall avoid the scheme.

Because it is a passive fund, the investors must invest through the direct plan to improve the return.

Not Suitable for

The fund is not suitable for the following categories of investors

First time investors/Conservative investors

The scheme is not suitable for first-time investors. Those investors may first invest in diversified index funds. You may refer to our article Best mutual funds for beginners for detailed study.

The first-time investors who also want to take international exposure may consider the Parag Parikh Flexi Cap fund.

Investors with Stable return expectations

The FANG+ Index has delivered high returns in the recent past but the same is due to the exceptional performance of some of the stocks in the index during recent years. The returns of the index could be highly volatile. The under-performance of some of the stocks may adversely impact the return of the scheme. Investors who desire stability in returns should avoid the scheme.

 

How to Invest?

Those interested in the offering may invest by following the link below:

https://transact.miraeassetmf.co.in/investor/#openModal

 

Bottom-line

The aggressive investors desiring higher returns may consider the scheme keeping in view the overall asset allocation. The first-time investors or the conservative investors may avoid investing in the scheme. If you are not sure about the investment you may consult your financial advisor.


Sources

https://www.miraeassetmf.co.in/mutual-fund-scheme/etf-and-fof/mirae-asset-nyse-fang-plus-etf

https://www.miraeassetmf.co.in/mutual-fund-scheme/etf-and-fof/mirae-asset-nyse-fang-plus-etf-fund-of-fund

https://en.wikipedia.org/wiki/Mirae_Asset_Financial_Group

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