- Investing in global AI companies
- Is global diversification important?
Niraj Shah in conversation with Mrin Agarwal and Rushabh Desai on 'The Mutual Fund Show'. #NDTVProfitLive
- Is global diversification important?
Niraj Shah in conversation with Mrin Agarwal and Rushabh Desai on 'The Mutual Fund Show'. #NDTVProfitLive
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TVTranscript
00:00 Minal and Rishab, thank you so much for joining us on the show.
00:03 And let's start off straight off the bat with something that caught the imagination of everybody
00:07 at the World Economic Forum and otherwise, which is AI.
00:10 And so many people would be thinking that if I want to play AI, and if there aren't
00:16 too many stocks that I know how to play, is there a mutual fund route to do this?
00:21 Now when we were looking at funds which probably have some bit of AI angle because of global
00:26 investing, there are a few active funds and a few passive funds, and which is what I want
00:31 to get to you both of you for, for people who are obsessed with investing into AI related
00:39 teams, is there a mutual fund route to do this?
00:42 Minal, I'll start off with you.
00:44 We have some names, we'll get to that as well.
00:45 But prima facie, is the mutual fund route, Indian mutual fund route, a good way to take
00:50 advantage of what could happen in AI over the course of the next few years?
00:57 Good afternoon, Neeraj.
00:59 Yes, absolutely.
01:00 For those who want to take exposure to this particular theme, certainly I think the Indian
01:08 mutual fund route is a good way and we have various international funds, we have various
01:13 ETFs, FOS that are available, through which investors can actually get exposure to some
01:20 of these, part of these magnificent seven stocks that have of course run up a lot in
01:26 the last one year.
01:27 But yes, the answer to your question is yes.
01:31 Okay.
01:32 Rushabh, what about you?
01:34 I mean, are you in agreement or do you believe that it's not great to use the Indian mutual
01:39 funds for the AI piece?
01:40 Good afternoon, Neeraj.
01:41 Thanks so much for having me on the show.
01:45 I absolutely agree with Mrin that investors should be obsessed with technology and AI,
01:51 particularly today.
01:52 I mean, who knew probably say like 10 years or 15 years back, where with a click of a
01:57 button we can access so much more, like a different world altogether.
02:01 Like imagine a CV being automated by chat GPT.
02:06 I mean, it was like mind boggling to see how with precision and perfection, AI technology
02:12 works today.
02:13 And as we move forward, the dependency of our lives on technology is going to increase
02:19 day by day itself.
02:21 So I think, a global exposure, especially in the technology space, in the AI space is
02:26 absolutely important.
02:28 And the most convenient and easiest route to invest for all brackets, whether it is
02:34 HNI, Ultra HNI or the retail segment, I think mutual funds is the best vehicle if someone
02:40 wants to take exposure in global companies, technology companies, giant companies who
02:45 have global presence, Neeraj.
02:47 So Rishabh, let's start with you on this.
02:50 There are a few passive funds which effectively mimic or mirror some of those global indices
02:56 which have the NVIDIA, Google, etc. of the world.
03:00 There are five names that we could think of, and we have those, they'll come up on the
03:04 screen in a moment from now.
03:06 But you've looked at that list as well.
03:09 Are these passive funds a good way to play the AI theme?
03:13 Neeraj, absolutely.
03:14 I think particularly Nasdaq 100 and the FANG+ Index Fund is the best two mutual funds what
03:23 I can think of to play the whole technology theme and the AI theme.
03:28 Now I'll just give you a small difference between both of these funds.
03:31 Now particularly Nasdaq 100 invests in the top 100 companies as per market cap in the
03:39 Nasdaq Index.
03:41 Now I pulled out some data around 50 to 60% out of these companies, say like 50-60 companies
03:48 in the Nasdaq 100 falls in the proper technology bracket and rest falls into different sectors
03:56 as well.
03:57 Now if you see the FANG+ Index, which Mirai has said FANG+ is a fund where investors can
04:04 look at, now they invest in top 10 innovation companies globally.
04:10 Now it can be from the US market, it can be from the China market.
04:16 So if someone wants to take exposure, I think these two funds are the best vehicles rather
04:23 than scouting for other global funds.
04:27 I think passive funds, if someone wants to take 100% pure global exposure, I think passive
04:33 funds like Nasdaq 100 and FANG+ funds will do the job.
04:38 Okay, Mirin, sorry out of time completely, but one quick response from you on either
04:43 the passive or the active side, are there funds that you believe are good ones to play
04:47 the AI theme?
04:48 No, I actually agree with what Rishabh said and one of the other reasons why you need
04:54 to look at the mutual funds and not trying to do this yourself, not trying to buy the
04:59 stocks yourself is because of the tax compliance that's associated with foreign stocks.
05:05 So it's pretty high, especially with unlisted equity in India.
05:08 So I also agree that the Mirai Asset, FANG+ and the Motilal-Oswal Nasdaq 100 ETF would
05:14 be your best bet if you want to take exposure to this.
05:17 You also have the Mirai Asset, S&P 500 that's got a high exposure to this segment as well.
05:23 But I think the FANG+ ETF, which Rishabh also spoke about, seems to be the best bet.
05:29 But remember, this is a thematic fund, so it's going to come with its risks.
05:34 Okay, well, we are out of time completely, but thank you so much, both of you for joining
05:39 us on this very quick-paced truncated episode of the Mutual Fund Show.
05:42 Really appreciate your time and much appreciate.
05:46 And viewers, that's it on this leg of the Mutual Fund Show.
05:48 Stay tuned.
05:49 We'll be back with more market action on NETB Profit.
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07:09 (upbeat music)