The ICICI Prudential Mutual Fund has launched the ICICI Prudential NASDAQ 100 Index Fund, an open index fund that tracks the NASDAQ100 index. The fund offers Indian mutual fund investors the opportunity to diversify their national portfolio in US equities. The Nasdaq 100 Index is a large-cap growth index and comprises 100 of the top national and international nonfinancial companies based on market capitalization. Some of the top US stocks on the Nasdaq 100 are Facebook, Apple, Amazon, Google, and Netflix, popularly known as FAANG stocks.
NASDAQ 100 Index Fund, whose NFO closes on October 11, 2021, aims to track NASDAQ100 index returns subject to tracking errors. The minimum investment required during the NFO is 1000 rupees. Although the Nasdaq 100 is currently trading (14472) near its all-time high (15701), the exposure to the fund is suitable for those looking to diversify abroad for the long term. In 2020, the Nasdaq 100 was up 47%, while the YTD was up almost 12% in 2021.
The Nasdaq 100 is comprised of companies from the major industrial, industrial, consumer staples, healthcare, consumer services, telecommunications groups , utilities and technology. It does not include shares of banks and financial companies, including investment companies. The maximum allocation of just under 55.22 percent is in the technology sector, while Consumer Services has a weight of just under 24.34 percent.
As an Indian consumer of the products and services of these companies, you can even invest in the growth story of these world leading companies. The NASDAQ 100 Index Fund is suitable for investors seeking geographic diversification in their share allocation in index funds. By investing in the fund, investors gain access to world leading companies that have a dominant position in the market.
markets around the world perform differently each year, so diversifying into international markets can allow investors to achieve better returns. The United States is not only a developed country with mature markets and the highest percentage of global equity markets (59%), but it is also a market that offers investors the opportunity to address topics such as cloud computing, e-commerce , artificial intelligence, etc. to invest. which is not widely available in domestic markets.
If you only invest in one economy, you are exposed to country risk. There are several micro and macroeconomic geopolitical factors that affect a country’s economy. In the event of internal economic and political conflicts within the country, the portfolio remains exposed to concentrated risk. To minimize risk and maximize return potential, you must diversify your investment portfolio. Diversification between asset classes, market capitalization, etc. it is incomplete unless it is geographically diversified.