Investors who want exposure to foreign FAANG stocks can buy the Motilal Oswal Nasdaq100 ETF

Investors who want exposure to foreign FAANG stocks like Tesla, Apple, Amazon, Microsoft, Facebook, Google etc can buy the Motilal Oswal Nasdaq100 ETF. The ETF has given a YoY return of 49% & 5-year CAGR of 26%. It has outperformed the Nifty and other Indices.

What is the Nasdaq 100 Index?

Ø The top 100 domestic and international non-financial securities listed on The Nasdaq Stock Market® based on market capitalization.

Ø One of the greenest major large cap U.S. equity benchmark indices.

Ø Long-established holdings include companies that have a legacy of leadership and innovation.

Ø Does NOT contain securities of financial companies, including investment companies

Ø Technology stocks have evolved from creating new and niche consumer products to a group of companies upon which every industry and sector have become dependent. The companies within the Nasdaq 100 represent the true innovators of the modern economy bringing disruption to the old economy on a global basis.

Ø Today, Apple, Microsoft, Google, Facebook and other Nasdaq 100 components have become the global leaders of business and are the new industrials.

The Nasdaq 100 Index provides outperformance over the S&P 500 Index, the Dow Jones Index and Russel 2000 Index.



It has also heavily outperformed the Nifty 50 Index.

Growth 1995 to 2018: Nifty 50 and Nasdaq 100 Index





Portfolio

The top 10 holdings of the Motilal Oswal Nasdaq100 ETF are the following:

Apple Inc.
Microsoft Corp
Amazon Com Inc
Tesla Inc
Facebook Inc
Alphabet Inc A
Alphabet Inc
Nvidia Corp Com
Paypal Holdings Inc
Comcast Corp - Class A



Growth with diversification examples

Inherent diversification benefits with growth

Facebook

Facebook, Inc. operates a social networking website. The Company website allows people to communicate with their family, friends, and co-workers.

Facebook has grown 14.7% p.a in the past 3 years and 18.7% p.a in the past 5 years.

Netflix Inc. (E-Commerce Discretionary)

Netflix Inc. is an Internet subscription service for watching television shows and movies.

Netflix Inc. has grown 56.5% p.a CAGR in the past 3 years and 41.3% p.a CAGR in the past 5 years.

NVIDIA Corp

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.

The Company's products provide interactive 3D graphics to the mainstream personal computer market.

NVIDIA Corp has grown 70.1% p.a in the past 3 years and 53.0% p.a in the past 5 years.

Take-Two Interactive Software, Inc.

Take-Two Interactive Software, Inc. develops, markets, distributes, and publishes interactive entertainment software games and accessories. The Company's products are for console systems, handheld gaming systems and personal computers and are delivered through physical retail, digital download, online, and cloud streaming services..

Take-Two Interactive Software, Inc. has grown 34.4% p.a CAGR in the past 3 years and 34.6% p.a CAGR in the past 5 years.

Motilal Oswal Nasdaq100 ETF

1. India’s 1st US Equity based ETF

a. Rupee denominated investment

b. For Investor, it does not fall under foreign investment cap of $250k.

2. Indian market hours access – Motilal Oswal Nasdaq 100 trades during Indian market hours.

a. Real-time iNAV published

3. Investment:

a. Passive Investing: no discretion with fund manager.
b. Transparent portfolio.
c. Listed on NSE and BSE.

4. A mutual fund scheme with the convenience of real time liquidity and prices

– Low cost structure: Total Expense Ratio (TER) of 0.50% p.a.

Traditional investment products have TER > 2% p.a.

– No loads (no entry load, no exit load)

5. Taxed as ‘investment other than equity oriented fund’ (i.e. debt taxation with/without indexation benefits).

Risks

The risks are that the ETF is a sectoral Index and concentrated only in Tech stocks. This can make the ETF very volatile as compared to a braod-based Index such as the S&P500 or the Nifty 50.