Nevertheless, in response to SEBI’s latest directive, Mirae Asset has paused new investments into this fund, leaving many traders questioning how they’ll proceed benefiting from the continuing FAANG rally. So, what’s subsequent? How can traders maintain capturing the momentum of those tech giants?
The Continued Enchantment of FAANG Shares
Whenever you consider international tech innovation, FAANG shares are sometimes the primary to return to thoughts. These firms have persistently led the cost in shaping the digital and tech panorama. Regardless of market fluctuations, FAANG shares have proven resilience, robust development, and an uncanny means to adapt to new developments. Right here’s a fast snapshot of their latest 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 by way of 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 companies and growth into worldwide markets have solidified its place as a tech powerhouse.Netflix: With a 92% leap in inventory worth in 2024, Netflix continues to thrive, largely as a result 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 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 maintain it on the forefront of the tech sector.
These firms will not be 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 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 traders publicity to the NYSE FANG+ Index, which tracks 10 main expertise and client firms, 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 probably the most influential expertise and media firms, 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 horny funding automobile for these trying to faucet into the way forward for expertise.
Listed here 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 firms which are on the forefront of the tech revolution, making it a compelling selection for traders.
How Indians Can Put money into FAANG Shares
Investing in FAANG shares instantly is usually a bit tough for Indian traders since these firms are listed on US inventory exchanges. Nevertheless, there are a number of methods to realize publicity to those shares:
1. Direct Funding in US Shares
Indian traders can instantly buy shares of FAANG firms listed on the NYSE and Nasdaq. This may be finished via 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 traders can acquire publicity to FAANG shares via ETFs or mutual funds that monitor international tech shares. These funds usually monitor indices just like the NYSE FANG+ Index, providing a simple technique to entry FAANG shares while not 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 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, often 2x or 3x. Leveraged ETFs are designed for skilled traders who’re snug with greater volatility and the potential for higher rewards—or losses.
Listed here are some outstanding leveraged ETFs that monitor the FANG+™ Index:
– Direxion Each day NYSE FANG+ Bull 2X Shares (FNGU)
AUM: $6.60B
Expense Ratio: 0.95%
1-Yr 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 good for merchants trying 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-Yr Return: 36.04%
What it’s:
FNGO gives 3x leveraged publicity to the FANG+™ Index, aiming to triple the index’s every day efficiency. It’s suited to these with a powerful danger urge for food who need to capitalize on excessive volatility.
– Direxion Each day NYSE FANG+ Bull 2X Shares (FNGG)
AUM: $62.17M
Expense Ratio: 0.98%
1-Yr 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 technique to acquire amplified publicity to the index.
– MicroSectors FANG+™ Index 2X Leveraged ETN (FNGS)
AUM: $403.06M
Expense Ratio: 0.58%
1-Yr Return: 17.70%
What it’s:
FNGS gives 2x leverage however at a decrease expense ratio, offering traders with a more cost effective technique to acquire publicity to the FANG+™ Index.
– MicroSectors FANG+™ Index -3X Inverse Leveraged ETN (FNGD)
AUM: $82.29M
Expense Ratio: 0.95%
1-Yr 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 in search of diversified publicity to the tech sector with out the amplified danger of leveraged merchandise.
Listed here are some notable ETFs for Indian traders trying to acquire publicity to FAANG shares:
– MicroSectors FANG+™ Index 3X Leveraged ETN (FNGU)
1-Yr Return: A staggering 132.89%
3-Yr CAGR: 17.80%
5-Yr CAGR: 48.13%
What it’s:
FNGU gives triple leveraged publicity to the FANG+™ Index. It’s good for traders in search of high-reward potential however ought to be approached with warning as a result of its leveraged nature.
– Granite Shares 2x Lengthy META Each day ETF (FBL)
1-Yr Return: 101.06%
What it’s:
Centered solely on Meta, this ETF gives twice the every day efficiency of Meta’s inventory. Whereas it gives excessive development potential, traders ought to be aware of the focus danger concerned.
– ProShares UltraPro QQQ (TQQQ)
1-Yr Return: 52.60%
5-Yr 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 well-liked selection for traders in search of diversified tech publicity with greater danger.
– ProShares Extremely QQQ (QLD)
1-Yr Return: 39.36%
5-Yr 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-Yr Return: 35.53%
5-Yr CAGR: 13.33%
What it’s:
SKYY focuses on cloud computing firms comparable to Amazon, Microsoft, and Alphabet, making it a superb selection for traders in search of publicity to the rising cloud sector.
– iShares Expanded Tech Sector ETF (IGM)
1-Yr Return: 34.10%
5-Yr 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 ideally suited for traders trying to diversify throughout the tech area.
In case you’re trying to spend money on FAANG shares or ETFs monitoring the FANG+™ Index, shopping for them instantly via a US dealer may help scale back monitoring error and decrease the expense ratio in comparison with investing via Indian mutual funds. With SEBI limiting contemporary inflows into sure worldwide mutual funds, direct investments present a extra environment friendly technique to acquire publicity to international tech with out the added prices of intermediaries.
Key Takeaways
Investing in FAANG-focused ETFs gives a simple technique 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 in addition 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 may 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’ll be able to take advantage of this ongoing development story.
(Viram Shah is Founder & CEO of Vested Finance)
