Mirae Asset Mutual Fund’s two new AI and EV-Focussed NFOs bring opportunities for Indian investors to invest in major global tech companies
Mirae Asset Mutual Fund has launched two open-ended schemes focussed on the overseas exchange-traded funds (ETF): Mirae Asset Global Electric & Autonomous Vehicles ETF Fund of Fund and Mirae Asset Global X Artificial Intelligence and Technology ETF Fund of Fund.
The former (EV FoF) will invest in ETFs focussed on global electric and autonomous vehicle manufacturers and related technology and components, while the latter (AI FoF) will invest in Global X Artificial Intelligence and Technology ETF, focussing on the AI and tech segment.
According to the fund house, these are the first such mutual fund schemes based on companies dealing with future technologies to be launched in India.
The New York-based GlobalX, a leading ETF provider and a member of Mirae Asset Financial Group, manages over US$40 billion AUM (asset under management) in thematic ETFs.
Both NFOs are open-ended fund of fund schemes benchmarked on Indxx Artificial Intelligence & Big Data Index (TRI) (INR)
The funds are open for subscription from August 16, 2022, to August 30, 2022, and in both schemes, the minimum initial investment is Rs 5,000 and thereafter, in multiples of Re 1.
They will have a regular and direct growth-driven plan.
Also, the minimum additional investment post the NFO is Rs. 1,000, and thereafter in multiples of Re 1 in both plans.
The fund house will offer all three facilities of SIP (Systematic Investment Plan), STP (Systematic Transfer Plan) and SWP (Systematic Withdrawal Plan) to customers.
In the case of redemption or switch out, there will be a 1% charge if the units are withdrawn within 365 days from the date of allotment and zero charges thereafter.
Commenting on the funds in a press statement, Swarup Mohanty, the CEO of Mirae Asset Investment Managers (India) Private Limited, said Mirae Asset wants to offer Indian investors unique global offerings to broaden their investment horizon.
AIQ Index comprises 83 companies across 20 industries, with a combined value of $13.2 trillion. According to Bloomberg, the AIQ Index has returned over 20% in the last seven years, as of July 31, 2022. Hence, the funds give exposure to diversified global companies engaged in electric and autonomous vehicles, artificial intelligence, and other technologies.
Furthermore, the index is designed to track companies in developed markets positioned to benefit from the development and utilization of AI in their products and services.
According to the fund, the index will follow an annual reconstitution (January) and a semi-annual rebalancing schedule (January and July). The index will also be in two categories: AI Developers and AI Hardware. It said that the top 60 companies from category one and the top 25 from category two would form the final index.
Some constituents of the Global X Artificial Intelligence & Technology ETF include Apple, Microsoft, Oracle, Amazon, Tesla, Accenture, Alphabet, Qualcomm, Intel, Adobe, and Cisco Systems, among others.
According to data firm Statista, global corporate investment in artificial intelligence rose from $12.8 billion in 2015 to $93.5 billion in 2021 at a CAGR of 39.4% as of December 31, 2021. The global AI market is expected to surpass $1.5 trillion in the coming years.
In another study, the global financial services company PricewaterhouseCoopers (PwC) noted that AI could contribute about $15.7 trillion to the global economy by 2030 due to increased productivity and consumption. Manufacturing, financial services, and retail are expected to see the highest near-term and mid-term growth.