Nevertheless, 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 Enchantment of FAANG Shares
If you consider international 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 progress, and an uncanny skill to adapt to new tendencies. 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 growth into rising markets. With a market cap nearing $4 trillion and improvements just like the M4 chip in MacBook Airs, Apple reveals 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 growth into worldwide markets have solidified its place as a tech powerhouse.Netflix: With a 92% bounce in inventory worth in 2024, Netflix continues to thrive, largely because of its ad-supported subscription mannequin and rising energetic customers. The corporate’s strikes into stay sports activities and gaming content material are anticipated to gas additional progress 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 are usually not simply family names; they’re integral to the digital infrastructure that powers international economies. So long as they continue to be leaders of their respective fields, FAANG shares are prone to proceed attracting investor consideration.
Leveraging FAANG Shares: Insights for Indian Buyers in 2025
The Mirae Asset NYSE FANG+ ETF Fund of Fund (FoF) gained reputation by providing Indian buyers publicity to the NYSE FANG+ Index, which tracks 10 main know-how and client corporations, together with the FAANG shares. The fund’s concentrated publicity to those international 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 contains 10 of essentially the most influential know-how and media corporations, and it’s equally weighted to forestall any single firm from having an excessive amount of affect. This construction offers balanced publicity, making it a gorgeous funding car for these seeking to faucet into the way forward for know-how.
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 affords a various choice of corporations which might be on the forefront of the tech revolution, making it a compelling selection for buyers.
How Indians Can Put money into FAANG Shares
Investing in FAANG shares instantly is usually a bit difficult for Indian buyers since these corporations are listed on US inventory exchanges. Nevertheless, 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 way of platforms like Vested, which facilitate worldwide inventory buying and selling for Indian residents.
2. ETFs and Mutual Funds with World Publicity
As demonstrated by Mirae Asset’s NYSE FANG+ ETF FoF, Indian buyers can achieve publicity to FAANG shares by way of ETFs or mutual funds that monitor international tech shares. These funds sometimes monitor indices just like the NYSE FANG+ Index, providing a simple approach to entry FAANG shares without having to purchase particular person shares. The monitoring error in US ETFs monitoring these indices can also be a lot decrease in comparison with Indian FoFs investing in US ETFs.
Whereas conventional ETFs provide 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, normally 2x or 3x. Leveraged ETFs are designed for skilled buyers who’re snug with larger volatility and the potential for higher 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 make the most 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 affords 3x leveraged publicity to the FANG+™ Index, aiming to triple the index’s each day efficiency. It’s fitted to these with a robust danger urge for food who need 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 robust approach 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 affords 2x leverage however at a decrease expense ratio, offering buyers with a more cost effective approach 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 provides 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 offers triple leveraged publicity to the FANG+™ Index. It’s excellent for buyers in search of high-reward potential however must be approached with warning because 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 affords twice the each day efficiency of Meta’s inventory. Whereas it affords excessive progress potential, buyers must be aware 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 affords 3x leveraged publicity to the Nasdaq-100 Index, which incorporates many tech leaders like Amazon, Apple, and Microsoft. It’s a well-liked selection for buyers on the lookout for diversified tech publicity with larger 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 resembling Amazon, Microsoft, and Alphabet, making it a superb selection 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 offers publicity to the broader tech sector, together with FAANG shares and different main tech leaders. It’s ideally suited for buyers seeking to diversify throughout the tech area.
When you’re seeking to put money into FAANG shares or ETFs monitoring the FANG+™ Index, shopping for them instantly by way of a US dealer will help cut back monitoring error and decrease the expense ratio in comparison with investing by way of Indian mutual funds. With SEBI limiting recent inflows into sure worldwide mutual funds, direct investments present a extra environment friendly approach to achieve publicity to international tech with out the added prices of intermediaries.
Key Takeaways
Investing in FAANG-focused ETFs offers a simple approach to trip the tech wave. Nevertheless, these investments include various ranges of danger relying on their leverage and focus. Leveraged ETFs like FNGU and TQQQ can ship extraordinary returns, however additionally they amplify losses throughout downturns. Extra diversified choices like SKYY and IGM provide steadier progress, although they could lag throughout bull markets.
Diversification is Essential
Whereas FAANG shares and associated ETFs are engaging for his or her progress 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 lessons will help mitigate these dangers and guarantee sustainable portfolio progress.
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 along with your danger tolerance and monetary objectives, you possibly can benefit from this ongoing progress story.
(Viram Shah is Founder & CEO of Vested Finance)
