Digital assets, cryptocurrency and metaverse are the trending words in the financial markets these days. Of course, the mutual fund industry also wants to join the party. Two fund houses – Navi Mutual Fund and Aditya Birla Sun Life Mutual Fund- have filed drafts for such funds. Navi Metaverse ETF Fund of Fund and Aditya Birla Sun Life Blockchain & Virtual Digital Assets ETFs Fund of Fund are awaiting Sebi’s approval for launch.
However, these two schemes are not the pioneers in this field. Last year, Invesco Mutual Fund almost launched the Invesco India – Invesco CoinShares Global Blockchain ETF Fund of Fund- on November 24. However, the fund house had to put the launch on hold due to uncertainty around rules on cryptocurrency investments in India.
Now, that the rumors of a ban on cryptocurrencies are over, the industry is stepping up. According to the draft statement, ABSL Blockchain & Virtual Digital Assets ETFs Fund of Fund will be an open ended fund of funds scheme investing in the units of ETFs focused on the global blockchain theme. The fund will be benchmarked against MSCI ACWI IMI Blockchain Economy Index.
On the other hand, Navi Metaverse ETF FOF will be an open-ended fund of fund scheme investing in units of overseas ETF’s which provide exposure to companies that are positioned to benefit from the advancement of Metaverse.
Mutual fund advisors believe that these new schemes are keeping up with the new time and can be a good way of diversifying into newer arenas. However, whether these schemes make an important contribution to portfolios of retail investors at the moment is a question that needs some more thinking, advisors say.
“We are already living in a digital world and in the future, technology is only going to advance further. I am personally very bullish on the global IT & Technology space. Even though the future of Metaverse and Blockchain technologies look bright these are comparatively very new technologies and their market is not fully explored and matured. There will be a lot of initial risk and hick ups thus I would not recommend investors to invest in pure Metaverse and Blockchain technology companies and would like to wait till this market is a bit more explored and mature globally. At the current moment investors looking to invest in the IT & Technology space can look at investing in well diversified established global multi-tech producing giant companies and recommend investors to look at NASDAQ 100 and FANG PLUS funds,” says Rushabh Desai, Founder, Rupee With Rushabh Investment Services, based in Mumbai.
Babu Krishnamoorthy, Chief Sherpa, FinSherpa Financial Advisors, believes that even though the metaverse and blockchain are the future technologies, more regulations are required to give this space some balance. “You will see investors making asymmetrical returns in such tech. Hence, some will frown upon these funds and some will lap them up. The only thing investors should keep in mind is that these are future tech funds and good options but very high risk also. So proceed with caution,” says Babu Krishnamoorthy.