MF Tracker: Can this international fund which gave nearly 70% CAGR in 3 years maintain its rally?

Core Insights - The Mirae Asset NYSE FANG+ ETF FoF has shown significant performance since its launch, with a one-year return of 81.19% and a CAGR of 34.18% since inception [2][27] - The fund's performance is heavily influenced by the technology sector, which constitutes 51.52% of its portfolio, and has benefitted from strong earnings growth and investor optimism in AI and semiconductor segments [11][9] - The fund is currently closed for fresh lump-sum investments and new SIP registrations due to regulatory constraints, not reflecting its performance or market outlook [10][25] Performance Metrics - The fund delivered a negative return of approximately 33.16% in 2022, but positive returns of 19.47%, 92.47%, and 85.87% in 2021, 2023, and 2024 respectively [6][27] - Over the last three years, the fund has achieved a Treynor ratio of 9.61, an alpha of 3.97, and a Sortino ratio of 1.20, indicating strong risk-adjusted performance [19][28] - The underlying NYSE FANG+ Index has a trailing P/E of 38.5x, higher than the S&P 500 and Nasdaq 100, reflecting high growth expectations [15][28] Sector and Stock Analysis - The fund's concentrated portfolio includes 10 stocks, with major contributions from NVIDIA Corp, Broadcom Inc, Meta Platforms Inc, and Netflix Inc, driven by the AI boom [11][28] - The earnings per share (EPS) of the index constituents increased from USD 151.78 to USD 352.60, translating to a CAGR of 25.3% in USD terms [8][7] - The fund's exposure to the U.S. dollar has been beneficial for Indian investors due to INR depreciation, enhancing returns [7][9] Investment Strategy - The fund is suitable for experienced or risk-tolerant investors, with recommendations to allocate up to 5% of their overall portfolio to such concentrated international themes [21][22] - Systematic Investment Plans (SIPs) are suggested as a strategy to mitigate volatility and timing risks associated with lump-sum investments [20][21] - Investors are advised to maintain oversight and be prepared to adjust their exposure in response to market conditions, especially given the fund's high concentration and cyclicality [22][17] Market Context - Recent headwinds in the U.S. equity markets include elevated valuations, higher interest rates, and inflation, which could impact future performance [16][28] - The pause in fresh subscriptions for international funds is a regulatory measure, not a reflection of market conditions [25][29] - Alternatives such as domestic funds with international exposure are suggested for investors until direct global funds reopen for subscription [26][29]