Nevertheless, in response to SEBI’s current directive, Mirae Asset has paused new investments into this fund, leaving many traders questioning how they’ll proceed benefiting from the continued FAANG rally. So, what’s subsequent? How can traders hold capturing the momentum of those tech giants?
The Continued Attraction of FAANG Shares
If you consider world tech innovation, FAANG shares are sometimes the primary to come back to thoughts. These corporations have persistently led the cost in shaping the digital and tech panorama. Regardless of market fluctuations, FAANG shares have proven resilience, sturdy development, 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 powerful 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% 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 dwell sports activities and gaming content material are anticipated to gas additional development in 2025.Alphabet: Because the mum or dad firm of Google, Alphabet continues to guide 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 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 traders 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 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 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 gives balanced publicity, making it a beautiful funding automobile for these seeking to faucet into the way forward for know-how.
Listed below are the parts 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 gives a various number of corporations which are on the forefront of the tech revolution, making it a compelling selection for traders.
How Indians Can Put money into FAANG StocksInvesting in FAANG shares straight could be a bit difficult for Indian traders 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 StocksIndian traders can straight buy shares of FAANG corporations listed on the NYSE and Nasdaq. This may be finished by means of platforms like Vested, which facilitate worldwide inventory buying and selling for Indian residents.
2. ETFs and Mutual Funds with World ExposureAs demonstrated by Mirae Asset’s NYSE FANG+ ETF FoF, Indian traders can acquire publicity to FAANG shares by means of ETFs or mutual funds that observe world tech shares. These funds sometimes observe 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 traders who’re snug with increased volatility and the potential for larger rewards—or losses.
Listed below are some outstanding leveraged ETFs that observe the FANG+™ Index:- Direxion Each day NYSE FANG+ Bull 2X Shares (FNGU)AUM: $6.60BExpense Ratio: 0.95percent1-12 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: $417.18MExpense Ratio: 0.95percent1-12 months Return: 36.04percentWhat it’s:FNGO gives 3x leveraged publicity to the FANG+™ Index, aiming to triple the index’s day by day efficiency. It’s suited to these with a powerful danger urge for food who wish to capitalize on excessive volatility.
– Direxion Each day NYSE FANG+ Bull 2X Shares (FNGG)AUM: $62.17MExpense Ratio: 0.98percent1-12 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 approach to acquire amplified publicity to the index.
– MicroSectors FANG+™ Index 2X Leveraged ETN (FNGS)AUM: $403.06MExpense Ratio: 0.58percent1-12 months Return: 17.70%
What it’s:FNGS gives 2x leverage however at a decrease expense ratio, offering traders with a cheaper approach to acquire publicity to the FANG+™ Index.
– MicroSectors FANG+™ Index -3X Inverse Leveraged ETN (FNGD)AUM: $82.29MExpense Ratio: 0.95percent1-12 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 traders looking for diversified publicity to the tech sector with out the amplified danger of leveraged merchandise.
Listed below are some notable ETFs for Indian traders seeking to acquire publicity to FAANG shares:
– MicroSectors FANG+™ Index 3X Leveraged ETN (FNGU)1-12 months Return: A staggering 132.89percent3-12 months CAGR: 17.80percent5-12 months CAGR: 48.13%
What it’s:FNGU gives triple leveraged publicity to the FANG+™ Index. It’s excellent for traders looking for high-reward potential however needs to be approached with warning on account of its leveraged nature.
– Granite Shares 2x Lengthy META Each day ETF (FBL)1-12 months Return: 101.06%
What it’s:
Targeted solely on Meta, this ETF gives twice the day by day efficiency of Meta’s inventory. Whereas it gives excessive development potential, traders needs to be conscious of the focus danger concerned.
– ProShares UltraPro QQQ (TQQQ)1-12 months Return: 52.60percent5-12 months CAGR: 26.54%
What it’s:TQQQ gives 3x leveraged publicity to the Nasdaq-100 Index, which incorporates many tech leaders like Amazon, Apple, and Microsoft. It’s a preferred selection for traders in search of diversified tech publicity with increased danger.
– ProShares Extremely QQQ (QLD)1-12 months Return: 39.36percent5-12 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 traders who need excessive publicity to the tech sector however with barely decrease volatility.
– First Belief Cloud Computing ETF (SKYY)1-12 months Return: 35.53percent5-12 months CAGR: 13.33%
What it’s:SKYY focuses on cloud computing corporations resembling Amazon, Microsoft, and Alphabet, making it a wonderful selection for traders looking for publicity to the rising cloud sector.
– iShares Expanded Tech Sector ETF (IGM)1-12 months Return: 34.10percent5-12 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 ultimate for traders seeking to diversify throughout the tech area.
If you happen to’re seeking to put money into FAANG shares or ETFs monitoring the FANG+™ Index, shopping for them straight 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 approach to acquire publicity to world tech with out the added prices of intermediaries.
Key Takeaways
Investing in FAANG-focused ETFs gives an easy approach to experience 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 development, although they might lag throughout bull markets.
Diversification is Essential
Whereas FAANG shares and associated ETFs are engaging for his or her development potential, they need to be a part of a diversified portfolio. Over-concentration in tech shares can expose traders to heightened dangers, significantly throughout market corrections. Diversifying throughout sectors, geographies, and asset lessons 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 along with your danger tolerance and monetary objectives, you may profit from this ongoing development story.
(Viram Shah is Founder & CEO of Vested Finance)
