Nevertheless, in response to SEBI’s current directive, Mirae Asset has paused new investments into this fund, leaving many traders questioning how they will proceed benefiting from the continued FAANG rally. So, what’s subsequent? How can traders maintain capturing the momentum of those tech giants?
The Continued Attraction of FAANG Shares
Whenever you consider world tech innovation, FAANG shares are sometimes the primary to return 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 means to adapt to new traits. 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 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 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 companies 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 attributable to its ad-supported subscription mannequin and rising energetic customers. The corporate’s strikes into reside sports activities and gaming content material are anticipated to gasoline 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 maintain it on the forefront of the tech sector.
These corporations usually are not 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 recognition by providing Indian traders publicity to the NYSE FANG+ Index, which tracks 10 main expertise 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 contains 10 of probably the most influential expertise and media corporations, and it’s equally weighted to forestall any single firm from having an excessive amount of affect. This construction supplies balanced publicity, making it a pretty funding automobile for these seeking to faucet into the way forward for expertise.
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 affords a various number of corporations which might be on the forefront of the tech revolution, making it a compelling alternative for traders.
How Indians Can Spend money on FAANG Shares
Investing in FAANG shares straight could be a bit tough 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 Shares
Indian traders can straight buy shares of FAANG corporations listed on the NYSE and Nasdaq. This may be carried out by way 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 traders can acquire publicity to FAANG shares by way of ETFs or mutual funds that monitor world tech shares. These funds usually monitor indices just like the NYSE FANG+ Index, providing a simple solution 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, normally 2x or 3x. Leveraged ETFs are designed for skilled traders 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 Every 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 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-Yr Return: 36.04%
What it’s:
FNGO affords 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 wish to capitalize on excessive volatility.
– Direxion Every 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 robust solution 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 affords 2x leverage however at a decrease expense ratio, offering traders with a less expensive solution 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 searching 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-Yr Return: A staggering 132.89%
3-Yr CAGR: 17.80%
5-Yr CAGR: 48.13%
What it’s:
FNGU supplies triple leveraged publicity to the FANG+™ Index. It’s excellent for traders searching for high-reward potential however needs to be approached with warning attributable to its leveraged nature.
– Granite Shares 2x Lengthy META Every day ETF (FBL)
1-Yr Return: 101.06%
What it’s:
Centered completely on Meta, this ETF affords twice the every day efficiency of Meta’s inventory. Whereas it affords excessive development potential, traders needs 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 affords 3x leveraged publicity to the Nasdaq-100 Index, which incorporates many tech leaders like Amazon, Apple, and Microsoft. It’s a preferred alternative for traders searching for 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 corporations comparable to Amazon, Microsoft, and Alphabet, making it a superb alternative for traders searching for 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 supplies publicity to the broader tech sector, together with FAANG shares and different main tech leaders. It’s superb for traders seeking to diversify throughout the tech area.
For those who’re seeking to spend money on FAANG shares or ETFs monitoring the FANG+™ Index, shopping for them straight by way of a US dealer will help scale back monitoring error and decrease the expense ratio in comparison with investing by way of Indian mutual funds. With SEBI limiting contemporary inflows into sure worldwide mutual funds, direct investments present a extra environment friendly solution to acquire publicity to world tech with out the added prices of intermediaries.
Key Takeaways
Investing in FAANG-focused ETFs supplies an easy solution 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 could 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 take advantage of this ongoing development story.
(Viram Shah is Founder & CEO of Vested Finance)
