PPFAS has received approval to launch two new passive outbound funds from
GIFT City: the Parag Parikh IFSC S&P 500 Fund of Fund and the Parag Parikh IFSC
Nasdaq 100 Fund of Fund. These funds will make it easier for Indian investors to
invest in U.S. stocks. Both funds will invest in index funds that track the S&P
500 and Nasdaq 100, following a fully passive strategy.
The funds are open to Indian individuals, corporates, trusts, and partnership
firms. They are benchmarked to the S&P 500 Net TRI and Nasdaq 100 Notional Net
TRI, respectively. Each unit costs US$100, with daily NAV calculation,
no lock-in period, and no exit fees.
Investors can choose between two classes:
Class A (Direct): Minimum investment US$5,000, TER 0.30%
Class B (Regular): Minimum investment US$5,000, TER 0.60%
Key benefits of these funds include:
No U.S. inheritance tax
Simplified Indian tax compliance because taxes are paid at the fund level
Lower forex and transaction costs
The funds will invest 90–100% in ETFs and UCITS tracking the indices and 0–10% in debt instruments.
A major advantage is the tax structure:
Gains on units held less than 2 years are taxed at 42.7%
Gains on units held more than 2 years are taxed at 14.95%
Investors avoid U.S. estate tax and complicated Schedule FA disclosures, which are usually required for direct U.S. investments.
This makes it simpler, safer, and more cost-effective for Indian investors to
access U.S. equity markets.