HDFC Developed World Indexes Fund of Funds

HDFC Mutual Fund launches Developed World Indexes Fund of Funds NFO, an open-ended fund of funds investing in units of overseas Index Funds and/or ETFs, which will track the MSCI World Index.

NFO Details:

Open from 14-28 Sep 2021.

Minimum amount: Rs.5000 and in multiples of Rs.1000.

Where Will The Scheme Invest?

The Scheme will invest in units/shares of overseas Index Funds and/or ETFs (mentioned below table) offered by Credit Suisse Asset Management which operates as an asset management company.

HDFC WORLD FOF

MSCI World Index Captures:

  • Large and mid-cap representation.
  • Across 23 developed markets countries.
  • Covers approximately 85% of the free float-adjusted market capitalization in each country.
  • 1500+ Constituents
MSCI World Index captures 40 out of top 50 most Innovative Companies:

HDFC INDEX FUND
source: hdfc mf


MSCI World Index Vs Nifty 50 TRI : Performance & Risk Metrics.

HDFC MF

HDFC Developed World Indexes Fund of Fund offers can be considered for long-term, as it offers good diversification and low correlation across markets. 

NAVI Vanguard Total Stock Market Index ETF FOF

Navi AMC to launch Vanguard Total Stock Market Index Fund FOF. Today it filed draft prospectus with SEBI to launch this FOF, which will invest in Vanguard Total Stock Market Index Fund ETF (VTI). 

For Indian investors, this might provide an excellent opportunity to invest in Vanguard universe of funds and ETFs. The Vanguard Total Stock Market Index Fund ETF tracks the performance of the CRSP US Total Market Index, with an expense ratio of 0.03% and low tracking error.

Vanguard
About Vanguard:

Vanguard is one of the world's largest investment companies, offering a large selection of low-cost mutual funds, ETFs, advice, and related services. They manage about $7.2 trillion in global assets in 209 U.S. funds and about 232 additional funds in markets outside the United States.

Their top funds include Vanguard Total Stock Market Index Fund (VTSAX), Total International Stock Index Fund (VTIAX) and Total Bond Market Index Fund (VBTLX), with average expense ratio of about 0.09%.

By using broad-based, low-cost funds from a company like Vanguard, without having to manage a large number of funds, the investors can achieve the right asset allocation and diversification. 

Mirae SPX 500 Top 50 ETF & FOF

Mirae AMC to launch Mirae SPX 500 Top 50 ETF & FOF. 

The ETF invests in the Top 50 companies of S&P 500 Index as per free float market cap. The Fund of Fund will invest in the ETF.

NFO period: 1 - 14 September, 2021.
ETF to be listed in NSE & BSE.
Benchmark: S&P 500 Top 50 TRI (Total Return Index) (INR).
Minimum amount: Rs.5,000.
Taxation:  Debt.

SPX 500 Top 50 Index is an index that tracks the performance of 50 mega cap companies in United States.

S&P 500 Top 50 Index: Periodic performance:

S&P 500 Top 50 Index
source Mirae MF

How is different from Motilal SPX 500 Index Fund?

Motilal SPX 500 index fund is a broad based one and Mirae ETF has top 50 stocks. The SPX 500 Top 50 has slightly outperformed the SPX 600 index, due to its top 50 concentration. 

The Top 50 Index has outperformed S&P 500 Index and Nifty 50 Index in 7 out of 11 calendar years & 8 out of 11 calendar years respectively.


Conclusion: As part of diversification, global exposure is necessary, especially via index funds. There is little to choose between Motilal SPX 500 fund and Mirae FOF, as both offer similar returns. The expense ratio and tracking error of the funds, could make a difference.

How to trade US stocks from India? - NSE IFSC

The National Stock Exchange (NSE) through its GIFT City arm in the International Financial Services Centre (IFSC) has brought in new facilities that will enable investors to buy and sell US Stocks. 

The NSE International Exchange, which is a wholly-owned subsidiary of the NSE India announced that US Stocks would be available for trade and delivery.

This means that Indian investors can now buy and sell stocks in companies like Tesla, Apple, Google, Microsoft and other prominently listed US entities. The offerings will be in the form of unsponsored depository receipts.

The product enables resident individuals to easily and cost effectively invest in US stocks under the LRS framework of RBI (which permits the resident individuals to remit up to USD 2,50,000 per financial year.

NSE IFSC

Here are some of the details available about NSE IFSC.

How many stocks would be available?

About 50 stocks are to be made available for trading and investing from both New York and Nasdaq stock exchanges. The stocks will be trading just like NSE in NSE IFSC.

Are ETFs available?

Yes, about 5 ETFs including SPDR S&P 500 ETF Trust (SPY) are to be available.

What are the trade timings?

The trade timings are same as US markets  - 7 PM TO 1.30 AM (IST)

Can I trade in the existing trading account with my broker?

No. You need to open a new trading account with Demat with your existing broker, provided he is offering the services. Most brokers are likely to offer the same.

How the pricing is going to be done?

Each US stock will be priced in the range of USD 3 to 5, approximately Rs.200-400.

Will more stocks be available for trading?

Yes, more stocks and ETFs are likely to be included in the near future. The exchange is expected to be operational in 2 to 3 months time.

Taxation:

There is going to be No STT and the taxation will be applicable as per GIFT City regulations.

This is an an innovative product from NSE and it enables resident individuals to easily and cost effectively invest in US stocks. Experienced with investors and HNIs are likely to show keen interest in this.

Most retail and small investors are better-off investing through existing mutual funds like SPX 500, Nasdaq 100  and FANG+  index funds.