The potential for equity investing is expanding. For investors, the domestic market will no longer be a barrier. Shares of the world's leading corporations can now be added to an investor's portfolio.
The HDFC Mutual Fund launches a Fund of Funds (FOF) that will track the MSCI World Index. On September 17, 2021, the new fund offer (NFO) will begin and end on October 1, 2021. Within 5 business days of the date of unit allotment, the Fund shall reopen for sale and repurchase.
The fund will flow into a number of Credit Suisse index funds and exchange-traded funds (ETFs) situated largely in Ireland and Luxembourg. The MSCI World Index will be monitored by these index funds collectively.
With nearly 1500 members, the MSCI World Index concentrates on big and mid-cap representation across 23 developed economies, encompassing roughly 85 percent of each country's free float-adjusted market capitalization.
The HDFC Developed Worldwide Index Fund is a passively managed investment vehicle that allows investors to participate in the global market.
The HDWI FoFs initiative will invest in global funds that will oversee five regions: Europe, Japan, the Pacific, Canada, and the US. International Exchange Trading Funds (ETFs) and index funds will be used to invest in the plan. The computer will also keep an eye on the MSCI global code.
The MSCI World Index encompasses the regions that account for around 56% of global gross domestic output (GDP). It accounts for 68 percent in the United States, 19 percent in Europe, 7% in Japan, 3% in Canada, and the remaining 3% in various developed countries around the Pacific. It does not, however, invest in emerging markets such as India and China.
Stocks the fund invests
The HDFC Developed Global Index Fund will invest in the stocks of the world's most innovative businesses. Alphabet, Disney, Facebook, Amazon, Apple, Tesla, Coca-Cola, Dell, HP, IBM, Microsoft, and Oracle are among these companies. These equities are associated with industries such as healthcare, information technology, consumer goods, and communications.
An open-ended fund of funds plan that invests in units/shares of foreign index funds and/or exchange-traded funds (ETFs) that track the MSCI World Index in aggregate.
The scheme's investment goal is to deliver long-term capital appreciation by investing passively in units/shares of foreign Index Funds and/or ETFs that, in aggregate, closely track the MSCI World Index, subject to tracking mistakes. There is no guarantee that the scheme's investment objective will be met.
HDFC Developed Global Index Funds require a minimum investment of Rs.5000. After that, there is no limit to how much money can be invested in it. Additional purchases after Rs.5000 require a minimum investment of Rs.1000. There will be a 1% exit load if the units are retrieved within 30 days of the allotted day. This cost, on the other hand, does not have to be paid for at least 30 days following redemption.
HDFC Developed World Indexes Fund of Funds is a long-term investment that provides strong diversification and minimal correlation across markets.
Who should invest?
Individuals should put their money into HDFC's Global Index Funds, which have a long-term investment objective. Those who want to take advantage of long-term growth might do so by investing in overseas index funds or ETFs.
According to financial counselors, such a fund is appropriate for first-time investors who have no prior experience with overseas funds. There is no country-specific risk because this fund's exposure will be dispersed across multiple countries. This fund makes sense for a conservative risk-averse investor.