Edelweiss US Technology Equity Fund of Fund: NFO Review

Edelweiss Asset Management has launched a new international fund of fund called the Edelweiss US Technology Equity Fund of Fund (FOF). The NFO will be open for subscription till February 28, and will re-open for continuous sale and repurchase on March 16.

The fund will be managed by Bhavesh Jain and Hardik Verma, the fund managers of other international funds like Edelweiss US Value Equity Off-shore Fund and Edelweiss ASEAN Equity Off-shore Fund.

The underlying fund, JP Morgan US Technology Fund, is a multi cap scheme which invests in technologies which are in early stages of adoption and are growing at a fast pace in the US market. According to the fund house, the fund is designed with the objective of providing access to emerging technologies which are in early stages of adoption based in the US.


Should you invest?
“International funds are risky equity schemes and sector schemes are riskier. So, this new scheme is a double-edged sword for retail investors. It is a risky product. If you are aware of international investing and the IT sector and want to take some exposure, should go for an existing international scheme with a strong track record. It is important to choose a scheme which has proved the worth of its strong research in such segments,” says Neeraj Chauhan, CEO, The Financial Mall.

“We know that `aware' investors are very less in number in our market. On the other, this is a fund of funds which generally has a higher expense ratio and is taxed like a debt scheme. To me, it doesn’t make sense for a retail mutual fund investor. International funds are used as a diversification tool by many retail mutual fund investors but those schemes are diversified and carry less risk. We need to understand that this is a risky scheme and might not be suitable for diversification purposes,” addds Neeraj Chauhan.

Scheme at a glance:
NFO closes: 28-Feb-2020
Category: International Fund
Minimum Investment: Rs 5,000
Exit Load: 1% for redemption within one year
Benchmark: Russel 1000 Equal Weighted Technology
Fund Managers: Bhavesh Jain and Hardik Verma