Aditya Birla Sun Life Launches NASDAQ 100 FoF (NFO) - Who Should Invest?

The Nasdaq 100 FOF, created by Aditya Birla Sun Life AMC, is an open-ended fund of funds that invests in units of overseas ETFs and/or Index Funds based on the Nasdaq-100 Index.

According to the AMC, new-economy areas such as payments, e-commerce, and transformative technology are presenting significant prospects.

These sectors' high-growth disruptors have consistently joined the Nasdaq-100 index, guaranteeing that the upward trend continues.

Instead of investing directly in stocks, bonds, or other securities, a 'Fund Of Funds' (FOF) is an investment strategy that involves maintaining a portfolio of other investment funds. A Mutual Fund FOF Scheme invests primarily in the units of another Mutual Fund scheme. Multi-manager investing is a term used to describe this sort of investment.
Investors can participate in the growth journey of these future-ready companies by investing in Aditya Birla Sun Life Nasdaq 100 FOF, it noted, despite the fact that these companies are mainly unrepresented in the Indian stock markets.

Aditya Birla Sun Life NASDAQ 100 FoF

This fund would invest in international exchange-traded funds (ETFs) and index funds that track the NASDAQ 100 Index. The NASDAQ 100 Index has outperformed in the last 5-10 years (25 percent annualised returns), thus investors would benefit from investing in it.
This fund invests in NASDAQ 100 firms through exchange-traded funds (ETFs). Investors can gain international exposure by investing in big firms that are members of the NASDAQ 100 index, such as Google, Facebook, Amazon, Twitter, and Netflix.

This fund would invest in current exchange-traded funds (ETFs) and index funds that track the NASDAQ 100 Index. The performance of the respective ETFs / Index Funds is shown below.

Who Should Invest?

Currency and geopolitical risks would be present in these overseas mutual funds. High-risk investors can put their money into this new fund for a period of 5-10 years. Such funds should be avoided by moderate to low-risk investors.

A FOF is a mutual fund that allows investors to invest in a variety of mutual fund schemes. A single FOF investment could allow you to invest in a variety of different schemes. These funds also have a moderate risk threshold due to their substantial diversification. As a result, even risk adverse investors can put their money into these products.

However, it's worth noting that FOFs are also good for long-term investing. If you have a longer investing horizon than three years, you should consider them.

To sum up, FoFs are similar to mutual funds in that they are vulnerable to market risk and need investors to give them a proper weighting in their total portfolio considering the risk and other expenses.