Nonetheless, in response to SEBI’s current directive, Mirae Asset has paused new investments into this fund, leaving many buyers questioning how they’ll proceed benefiting from the continued FAANG rally. So, what’s subsequent? How can buyers hold capturing the momentum of those tech giants?
The Continued Attraction of FAANG Shares
While you consider world tech innovation, FAANG shares are sometimes the primary to return to thoughts. These corporations have constantly led the cost in shaping the digital and tech panorama. Regardless of market fluctuations, FAANG shares have proven resilience, sturdy development, and an uncanny means to adapt to new developments. Right here’s a fast snapshot of their current efficiency:
Meta (previously Fb): In 2024, Meta’s inventory surged by a formidable 72%. The corporate’s investments in synthetic intelligence (AI) and the metaverse through its Actuality Labs division have paid off, boosting investor confidence and positioning Meta as a number one participant in the way forward for tech.
Apple: Apple’s inventory rose by 36% in 2024, buoyed by the profitable launch of the iPhone 15 and its enlargement into rising markets. With a market cap nearing $4 trillion and improvements just like the M4 chip in MacBook Airs, Apple exhibits no indicators of slowing down.
Amazon: Amazon’s 48% inventory surge in 2024 highlights its continued dominance in e-commerce and cloud computing. The corporate’s AI-driven providers and enlargement into worldwide markets have solidified its place as a tech powerhouse.Netflix: With a 92% soar in inventory worth in 2024, Netflix continues to thrive, largely on account of its ad-supported subscription mannequin and rising lively customers. The corporate’s strikes into reside sports activities and gaming content material are anticipated to gasoline additional development in 2025.Alphabet: Because the guardian firm of Google, Alphabet continues to steer in digital promoting and AI. Its Google Cloud division has expanded considerably, and its AI developments hold it on the forefront of the tech sector.
These corporations will not be simply family names; they’re integral to the digital infrastructure that powers world economies. So long as they continue to be leaders of their respective fields, FAANG shares are more likely to proceed attracting investor consideration.
Leveraging FAANG Shares: Insights for Indian Traders in 2025
The Mirae Asset NYSE FANG+ ETF Fund of Fund (FoF) gained recognition by providing Indian buyers publicity to the NYSE FANG+ Index, which tracks 10 main expertise and shopper corporations, together with the FAANG shares. The fund’s concentrated publicity to those world tech giants, together with the depreciation of the rupee, contributed considerably to its distinctive efficiency in 2024.
What’s the FANG+™ Index?
The NYSE® FANG+™ Index consists of 10 of probably the most influential expertise and media corporations, and it’s equally weighted to stop any single firm from having an excessive amount of affect. This construction gives balanced publicity, making it a sexy funding car for these seeking to faucet into the way forward for expertise.
Listed below are the elements of the FANG+™ Index (as of January 14, 2025):
-NVIDIA: 10.50%
-Meta: 10.35%
-Alphabet: 10.30%
-Broadcom: 10.24%
-Amazon: 10.06%
-Crowdstrike: 9.94%
-ServiceNow: 9.73%
-Microsoft: 9.69%
-Apple: 9.60%
-Netflix: 9.60%
This index provides a various choice of corporations which can be on the forefront of the tech revolution, making it a compelling alternative for buyers.
How Indians Can Put money into FAANG Shares
Investing in FAANG shares instantly could be a bit difficult for Indian buyers since these corporations are listed on US inventory exchanges. Nonetheless, there are a number of methods to achieve publicity to those shares:
1. Direct Funding in US Shares
Indian buyers can instantly buy shares of FAANG corporations listed on the NYSE and Nasdaq. This may be executed by means of platforms like Vested, which facilitate worldwide inventory buying and selling for Indian residents.
2. ETFs and Mutual Funds with International Publicity
As demonstrated by Mirae Asset’s NYSE FANG+ ETF FoF, Indian buyers can achieve publicity to FAANG shares by means of ETFs or mutual funds that monitor world tech shares. These funds usually monitor indices just like the NYSE FANG+ Index, providing a straightforward option to entry FAANG shares without having to purchase particular person shares. The monitoring error in US ETFs monitoring these indices can be a lot decrease in comparison with Indian FoFs investing in US ETFs.
Whereas conventional ETFs supply publicity to the FANG+™ Index, leveraged ETFs take issues up a notch by amplifying returns (and dangers). These ETFs use derivatives to multiply the returns of the underlying index by a set a number of, often 2x or 3x. Leveraged ETFs are designed for knowledgeable buyers who’re snug with greater volatility and the potential for larger rewards—or losses.
Listed below are some outstanding leveraged ETFs that monitor the FANG+™ Index:
– Direxion Day by day NYSE FANG+ Bull 2X Shares (FNGU)
AUM: $6.60B
Expense Ratio: 0.95%
1-12 months Return: 50.10%
What it’s:
FNGU is a 2x leveraged ETF designed to double the efficiency of the FANG+™ Index. If the index will increase by 1%, FNGU goals for a 2% return. This product is right for merchants seeking to reap the benefits of short-term actions within the tech sector.
– MicroSectors FANG+™ Index 3X Leveraged ETN (FNGO)
AUM: $417.18M
Expense Ratio: 0.95%
1-12 months Return: 36.04%
What it’s:
FNGO provides 3x leveraged publicity to the FANG+™ Index, aiming to triple the index’s each day efficiency. It’s fitted to these with a powerful danger urge for food who wish to capitalize on excessive volatility.
– Direxion Day by day NYSE FANG+ Bull 2X Shares (FNGG)
AUM: $62.17M
Expense Ratio: 0.98%
1-12 months Return: 33.72%
What it’s:
FNGG is one other 2x leveraged ETF that tracks the FANG+™ Index. It’s a smaller fund however nonetheless a strong option to achieve amplified publicity to the index.
– MicroSectors FANG+™ Index 2X Leveraged ETN (FNGS)
AUM: $403.06M
Expense Ratio: 0.58%
1-12 months Return: 17.70%
What it’s:
FNGS provides 2x leverage however at a decrease expense ratio, offering buyers with a less expensive option to achieve publicity to the FANG+™ Index.
– MicroSectors FANG+™ Index -3X Inverse Leveraged ETN (FNGD)
AUM: $82.29M
Expense Ratio: 0.95%
1-12 months Return: -41.61%
What it’s:
FNGD is an inverse leveraged product that offers you the other efficiency of the FANG+™ Index. If the index falls, FNGD rises by 3 times that quantity.
Different ETFs for FAANG Publicity
Along with the leveraged ETFs particularly designed for the FANG+™ Index, there are additionally different ETFs that present publicity to FAANG shares and the broader tech sector. These ETFs are extra appropriate for buyers in search of diversified publicity to the tech sector with out the amplified danger of leveraged merchandise.
Listed below are some notable ETFs for Indian buyers seeking to achieve publicity to FAANG shares:
– MicroSectors FANG+™ Index 3X Leveraged ETN (FNGU)
1-12 months Return: A staggering 132.89%
3-12 months CAGR: 17.80%
5-12 months CAGR: 48.13%
What it’s:
FNGU gives triple leveraged publicity to the FANG+™ Index. It’s excellent for buyers in search of high-reward potential however ought to be approached with warning on account of its leveraged nature.
– Granite Shares 2x Lengthy META Day by day ETF (FBL)
1-12 months Return: 101.06%
What it’s:
Centered completely on Meta, this ETF provides twice the each day efficiency of Meta’s inventory. Whereas it provides excessive development potential, buyers ought to be conscious of the focus danger concerned.
– ProShares UltraPro QQQ (TQQQ)
1-12 months Return: 52.60%
5-12 months CAGR: 26.54%
What it’s:
TQQQ provides 3x leveraged publicity to the Nasdaq-100 Index, which incorporates many tech leaders like Amazon, Apple, and Microsoft. It’s a well-liked alternative for buyers searching for diversified tech publicity with greater danger.
– ProShares Extremely QQQ (QLD)
1-12 months Return: 39.36%
5-12 months CAGR: 26.48%
What it’s:
Providing 2x leverage on the Nasdaq-100, QLD is a barely much less aggressive various to TQQQ, making it extra appropriate for buyers who need excessive publicity to the tech sector however with barely decrease volatility.
– First Belief Cloud Computing ETF (SKYY)
1-12 months Return: 35.53%
5-12 months CAGR: 13.33%
What it’s:
SKYY focuses on cloud computing corporations akin to Amazon, Microsoft, and Alphabet, making it a superb alternative for buyers in search of publicity to the rising cloud sector.
– iShares Expanded Tech Sector ETF (IGM)
1-12 months Return: 34.10%
5-12 months CAGR: 19.41%
What it’s:
IGM gives publicity to the broader tech sector, together with FAANG shares and different main tech leaders. It’s supreme for buyers seeking to diversify inside the tech house.
In case you’re seeking to spend money on FAANG shares or ETFs monitoring the FANG+™ Index, shopping for them instantly by means of a US dealer will help cut back monitoring error and decrease the expense ratio in comparison with investing by means of Indian mutual funds. With SEBI limiting recent inflows into sure worldwide mutual funds, direct investments present a extra environment friendly option to achieve publicity to world tech with out the added prices of intermediaries.
Key Takeaways
Investing in FAANG-focused ETFs gives a simple option to trip the tech wave. Nonetheless, these investments include various ranges of danger relying on their leverage and focus. Leveraged ETFs like FNGU and TQQQ can ship extraordinary returns, however in addition they amplify losses throughout downturns. Extra diversified choices like SKYY and IGM supply steadier development, although they might lag throughout bull markets.
Diversification is Essential
Whereas FAANG shares and associated ETFs are enticing for his or her development potential, they need to be a part of a diversified portfolio. Over-concentration in tech shares can expose buyers to heightened dangers, notably throughout market corrections. Diversifying throughout sectors, geographies, and asset courses will help mitigate these dangers and guarantee sustainable portfolio development.
In conclusion, FAANG shares and their corresponding ETFs stay a compelling funding avenue for 2025. By understanding the nuances of those funds and aligning them together with your danger tolerance and monetary targets, you’ll be able to profit from this ongoing development story.
(Viram Shah is Founder & CEO of Vested Finance)