Navi Mutual Fund has launched a new fund tracking the Nasdaq 100 index. Here are the details.
09-Mar-2022 •Ravi Banagere
Navi Mutual Fund launched a new Fund of Funds (FoF), Navi NASDAQ 100 FoF, on March 03, 2022 that tracks the Nasdaq 100 index. The new fund offer (NFO) will close for subscription on March 17, 2022. Navi NASDAQ 100 FoF will be managed by Pranav Vasa. Here are the key details of the NFO:
This NFO comes at a time when the mutual fund industry is on the brink of exhausting permissible foreign exposure as per SEBI rules and has therefore put gates on fresh investments in many of the international mutual funds. However, there is no impact on the schemes that invest in foreign ETFs because they have a separate limit, and there is enough runway for now. You can read more about it here.
About the strategy
Navi NASDAQ 100 FoF aims to invest in overseas funds that track the Nasdaq 100 index. This index tracks the performance of the 100 largest nonfinancial US companies listed on the Nasdaq Stock Exchange.
The index is tilted towards the technology sector with an exposure of 58.7 per cent and lists prominent companies such as Apple (11.65 per cent), Microsoft (10.09 per cent) and Amazon (6.76 per cent). Sectors like Technology, Consumer discretionary cover about 80 per cent of the overall index.
The expense ratio of Navi NASDAQ 100 FoF as proposed by the AMC is 0.13 per cent. This is on top of the expenses of the underlying ETFs/index funds.
Other funds tracking the Nasdaq 100
Motilal Oswal Mutual Fund launched an exchange-traded fund (ETF) tracking Nasdaq 100 way back in 2011. The fund provided 24 per cent returns in the past five years. In 2018, the AMC also launched the fund-of-funds (FoF) variant of its Nasdaq 100 ETF. In 2021, Kotak Mutual Fund, Aditya Birla SL and ICICI Prudential launched their respective funds to track Nasdaq 100.
About the performance
Nasdaq 100 has turned out to be a very rewarding investment avenue over the years and a suitable avenue for Indian investors looking to diversify internationally. The index has returned an average of 24.5 per cent in any five-year period over the last five years.
About the AMC
After acquiring the Essel Mutual Fund in April last year, Navi Mutual Fund launched its first product, the Navi Nifty 50 Index Fund in July 2021. Navi Mutual Fund manages total assets worth over Rs 976 crore (as of January, 2022). Of this, Rs 190 crore belongs to Navi Nifty 50 Index Fund and Navi Nifty Next 50 Index Fund, and the rest is primarily the legacy of Essel Mutual Fund. The AMC has launched four more passive funds recently but their assets data is not yet available.