How much is Indian MFs' exposure to US tech stocks & how have they performed? Prasad Sawant explains

Last week, Nvidia was in news due to the good results and after that the overall return, almost in a year, has gone beyond 170%. But having said that, can we understand the kind of exposure Indian mutual funds have towards US stocks and specifically tech stocks?
Prasad Sawant: We have somewhere around 70 mutual fund schemes in the market as of now which has exposure to US listed stocks. And out of that, few are having direct exposure to these technology stocks. Like if we know Motilal Oswal Nasdaq 100 ETF, then we have Mirae Asset NYSE Fang plus ETF Mutual Fund is there and Edelweiss technology related scheme is there, which is specifically into US technology stocks.

All these schemes have direct exposure to US listed technology stocks. In that, if we know well-known names like Microsoft, Apple, then we have Google, then Nvidia, all these stocks are already there in these particular schemes.

But when you talk about exposure, what is the ratio of this exposure? Are these funds dedicated towards the US market and US-specific stocks or is it just a part of their entire portfolio planning or portfolio composition where we see these kinds of stocks?
Prasad Sawant: Those funds in which we have 100% technology stocks, they will be purely into technology. But if you talk about the other schemes, like ICICI Pru US Bluechip Fund, in which they will have exposure to all these stocks listed on the US bourses.

Any specific reason why it is always advisable for investors to look for US tech-specific stocks? Any specific growth story or growth trigger over there? We have also seen Nvidia breaking all records and that rally trickled down to other technology and AI-specific stocks as well. Is there any specific reason one should be looking at this kind of diversification – maybe a Nasdaq diversification, which has most of the technology stocks of the US market?
Prasad Sawant: Why do we need to go to the technology-specific mutual fund scheme because the US is the innovation hub for all the technology stocks or else overall technology. Microsoft has the highest market cap across the globe, then secondly Google we know.

All these companies have that kind of legacy of innovating technology and over a period of time they have reached every corner of the globe. So, be it an emerging country like India or a developed country like China, everyone is using the products of Apple and Microsoft and everyone is using Google search engine. So that is the reason we need to look for technology stocks. As far as Nvidia is concerned, they are into graphics and networking solutions across US, China, and Taiwan and in the last three quarters, they have been able to give the kind of growth because of the new technology called AI, so artificial intelligence, which is again like innovated in the US. All these reasons are behind looking out for technological stocks in the US. As far as India is concerned, we have very good exposure to technology. Our own companies are doing really good. But considering the kind of growth given in the last 20-25 years, these stocks will do really well even in the coming years because technology is consistently improving.

What kind of returns have these funds given to the investors?
Prasad Sawant: Mirae Asset, this NYSE FAANG Plus ETF and also Edelweiss US Technology Scheme has also given more than 80% return. Others, like this Motilal Oswal Nasdaq 100 ETF has given 20-25% return in the three-year range. Active schemes like DSP US Flexi Cap has given returns in the range of 18%. So, if I talk about a three-year return, it is in the range of 15% to 20-25% return.