Navi, Aditya Birla Sun Life Mutual Funds File Metaverse, Virtual Digital Asset Themed FoF ETFs. Details here

Mutual fund deposits: Sachin Bansal’s Navi Mutual Fund and Aditya Birla Sun Life MF have filed a segregated fund-of-funds ETF with SEBI in an effort to help investors derive profits from companies invested in the metaverse and blockchain/virtual digital assets respectively .

According to the Scheme Information Document (SID) uploaded to the regulator’s website today (April 6, 2022), Navi Metaverse ETF Fund of Fund is an open-ended fund of funds investing in shares of foreign ETFs that provide exposure to companies that are positioned to benefit from the advancement of the metaverse.

Aditya Birla Sun Life Blockchain & Virtual Digital Assets ETFs Fund of Fund is also an open-end fund of funds that invests in the shares of global blockchain-themed ETFs (including virtual digital assets.

Virtual digital assets include crypto and NFTs.

For Navi’s Metaverse ETF, the benchmark would be “Solactive Metaverse Theme Index”. This index is designed to track the performance of companies that have, or are expected to have, significant exposure to providing products and/or services that contribute to the metaverse industry, according to SID.

The document further states that the minimum request amount for Navi Met-averse ETF Fund of Fund will be Rs 500 and in multiples of Re 1.

For Aditya Birla Sun Life ETF, the minimum request amount during the new fund offering period will be Rs 100 and in multiples of Re 1 thereafter.

Risks

Neither of these two schemes provides any assurance or guarantee that the investment objectives will be achieved.

Investments in mutual funds also involve risks such as trading volumes, settlement risk, liquidity risk, default risk, including possible loss of principal.

In the case of the Aditya Birla Sun Life ETF, SID says: “The technology is new and many of its uses may not yet have been tested. The mechanics of using distributed ledger technology to transact in other types of assets, such as securities or derivatives, are less clear. There is no guarantee that widespread adoption will occur. A lack of expansion in the use of blockchain technology could adversely affect an investment in the Fund.

The risk indicators for both plans show them falling into the “very high” risk category.

Asset allocation

In accordance with the SID, the NAV program will allocate 95-100% units of foreign ETFs that invest in companies engaged in Metaverse. The indicative list of foreign ETFs in which the program can invest includes “Proshares Metaverse ETF” and Roundhill Ball Metaverse ETF”. The program will invest a maximum of $300 million per mutual fund in foreign ETFs, in the global industry limit of $1 billion.

The Navi program will be managed by Aditya Mulki.

Aditya Birla Sun Life Blockchain Fund of Funds and Virtual Digital Assets ETFs will be allocated up to 95-100% in ETF units. The indicative list of ETFs in which this fund may invest includes:

Amplify Transformational Data Sharing ETF, Siren Nasdaq NexGen Economy ETF, First Trust Indxx Innovative Transaction & Process ETF, Bitwise Crypto Industry Innovators ETF, Global X Blockchain ETF, Invesco CoinShares Global Blockchain UCITS ETF, VanEck Digital Transformation ETF, First Trust SkyBridge Crypto Industry and Digital Economy ETF, ProShares Bitcoin Strategy ETF, Valkyrie Bitcoin Strategy ETF

Vinod Bhat would be the appointed fund manager of the Aditya Birla Sun Life scheme.