Top 5 Nasdaq 100 Mutual Funds in India for 2025

Among various U.S. stock indices, the Nasdaq is a leading benchmark for technology and innovation-led stocks.

[Read: Global Investing Amid Market Volatility: Should You Diversify Now?]

What Is Nasdaq Index?

Nasdaq Composite Index, which reflects the performance of all stocks on Nasdaq, is a bellwether for tech stocks. In contrast to the New York Stock Exchange (NYSE), whose list consists of a diverse portfolio of industries, Nasdaq has a large weightage of tech behemoths like Apple, Microsoft, Amazon, Alphabet (Google), and Meta (Facebook).

The Nasdaq-100 Index, a component of the larger Nasdaq Composite Index, is a leading benchmark that follows the performance of the largest 100 non-financial stocks trading on Nasdaq.

What differentiates the Nasdaq-100 is its make-up, which has a heavy bias toward technology and consumer discretionary sectors. As opposed to the S&P 500, which spans a wide range of industries, the Nasdaq-100 best represents firms that spark innovation and digital transformation.

This technology-focused character has traditionally resulted in good market performance but also makes the index more susceptible to economic cycles, interest rate fluctuations, and market volatility. For investors in India, accessing Nasdaq-100 stocks through mutual funds offers a chance to be part of the growth of some of the most vibrant companies in the world.

While both indices began at similar levels in early 2021, their trajectories diverged significantly. The Nasdaq 100, which is dominated by U.S. technology stocks, saw a sharp rally until late 2021, followed by a steep decline in 2022-likely due to the U.S. Federal Reserve's aggressive rate hikes, rising inflation, and a broader risk-off sentiment in global equity markets. In contrast, the Nifty 100 maintained a relatively stable performance, with smaller corrections and a more gradual recovery.

Post-2023, both indices exhibited strong recoveries, but Nifty 100 outperformed Nasdaq 100 in terms of overall growth. By late 2024, Nifty 100 peaked at 27,256, whereas the Nasdaq 100 reached a high of 22,165 before facing corrections. The higher volatility in the Nasdaq 100 suggests its sensitivity to interest rate cycles, earnings growth in the tech sector, and geopolitical uncertainties.

On the other hand, the Nifty 100's steadier rise can be attributed to India's strong domestic growth, corporate earnings resilience, and a diversified economic outlook. However, as both indices faced corrections after their peaks, it highlights the impact of global market conditions affecting both U.S. and Indian equities.

Overall, the Nasdaq 100's resilience and sustained upward momentum support its appeal to indian investors who want have global diversification by riding U.S. tech and growth stocks. The decision to invest in Nasdaq 100 focused mutual funds should depend on an investor's risk appetite and diversification strategy.

What's Driving Investor Interest in Nasdaq?

Indian investors increasingly want to spread their investment wings by putting their money into U.S. equity markets and, specifically, Nasdaq 100-focused mutual funds. The main reasons are:

• High Growth Opportunity: The Nasdaq-100 Index has generally outperformed most global indices over time, as it includes some of the highest-growth prospects from next-generation companies, particularly in technology.

• Overseas Market Exposure: Nasdaq investment comes with exposure to internationally known firms cutting dependence on the domestic markets.

• Currency Advantage: As these funds invest in American stocks, the investors are favoured by the rise of the U.S. dollar against the Indian rupee in the long term.

• Sectoral Advantage: Technology and innovation industries have always been the drivers of market growth, and Nasdaq is a favourable investment option due to this.

• Innovation and Market Leadership: Most Nasdaq-listed firms are industry leaders and innovators, which ensures sustained growth and technological progress.

• International Diversification: Although the Indian market is expanding, the American market, particularly Nasdaq, offers exposure to industries less dominant in India, including AI, cloud computing, and biotech.

• Resilience and Rebound: The Nasdaq index has shown healthy rebound trends following economic slowdowns, reflecting its capability to recover and provide long-term returns.

How U.S. Economic Scenario Could Shape Nasdaq's Trajectory

The U.S. economy has a key influence on the performance of the Nasdaq index. The prevailing economic environment is both an opportunity and a risk to investors who want to invest in Nasdaq stocks.

That being said, there remains uncertainty as a result of changes in economic policy since Donald Trump's return to the White House. His government's protectionist policies, including trade barriers and tariffs against large economies such as China and the European Union, may present headwinds for the American technology industry.

Since most Nasdaq-100 stocks are global in nature, any breakdown in foreign trade relations can affect supply chains, cost profiles, and overall profitability. Even tighter immigration laws can influence the supply of skilled labour, a key ingredient in maintaining innovation within the technology sector.

Federal Reserve policy attitudes have been a key factor in determining direction in the markets. With inflation moderating but remaining higher than the Fed's long-term target, investors are cautious regarding the prospect of interest rate action. Surprise rate increases would raise the cost of capital for growth-share technology companies, which make up the bulk of the Nasdaq 100.

Conversely, if the Fed indicates a dovish policy with possible rate cuts, it would give a major boost to high-growth stocks, pushing the index up.

Another major influence on the Nasdaq is the health of the U.S. dollar. A rising dollar can affect the revenue of global tech companies that derive a large percentage of their income from foreign markets.

[Read: Global Investment Opportunities: Best International Mutual Funds to Consider for 2025]

A big driver of Nasdaq's recent run has been the explosion of artificial intelligence (AI), cloud computing, and semiconductor technology. Nvidia, Microsoft, and Google are among the companies that have ridden AI innovation to investor optimism. The huge demand for AI-based technologies will continue to be a major growth driver, propping up Nasdaq 100's rally regardless of overall economic worries.

While the Nasdaq-100 has been a consistent performer over the decades, there are a few economic risks that may impact its future course. Greater scrutiny of large tech companies on issues of data privacy, monopolistic practices, and regulations for artificial intelligence might result in possible legal and financial penalties for Nasdaq titans like Apple, Microsoft, and Google.

Many Nasdaq-100 stocks are valued at high price-to-earnings (P/E) ratios. If earnings fail to meet expectations due to macroeconomic headwinds, stock corrections could be severe, leading to volatility in Nasdaq 100-focused mutual funds.

Hence, Investors should stay informed about macroeconomic trends and policy shifts that may impact Nasdaq 100's stability and long-term growth prospects.

Here's a List of Top 5 Nasdaq 100 Focused Mutual Funds:

Most Nasdaq 100-focused mutual funds in India operate as Funds of Funds (FoFs), meaning they do not invest directly in Nasdaq-listed stocks but instead channel their investments into an underlying overseas fund that tracks the Nasdaq-100 Index.

#1 - ICICI Pru Nasdaq 100 Index Fund

The scheme seeks to replicate the Nasdaq-100 Index subject to tracking errors. It was launched in October 2021 and has become increasingly popular among investors seeking global diversification. It has an AUM of Rs 1,771 crore as of February 2025 and has emerged as one of the most well-known Nasdaq-centric mutual funds in India.

With the robust historical performance of the Nasdaq-100, the fund has provided stunning returns over various intervals. Yet, since its opening, the average return has settled to around 12%, accounting for episodes of volatility in worldwide equity markets.

#2 - Aditya Birla SL Nasdaq 100 FOF

This fund, launched in November 2021, is mainly invested in the iShares NASDAQ-100 ETF, which tracks the performance of the NASDAQ-100 Index. BlackRock manages this ETF, which comprises industry giants in technology, consumer services, healthcare, and communications.

With the overrepresentation of technology, e-commerce, and online services in NASDAQ-100, the fund is suitable for investors who require long-term wealth generation via global diversification. Although the fund has posted impressive returns during positive U.S. market cycles, it is still susceptible to Federal Reserve monetary policies, tech industry gyrations, and geopolitical tensions.

As it is an ETF domiciled in the U.S., Indian investors investing through Fund of Funds (FoFs) need to factor in currency risks, taxation, and regulatory aspects.

#3 - Navi Nasdaq 100 FoF

Launched with the objective of granting Indian investors hassle-free access to leading U.S. technology and consumer firms, this fund is best suited for investors seeking to diversify beyond Indian equities. Since the fund is an FoF, it does not invest in Nasdaq stocks directly, but in an international ETF, and hence, this is an indirect yet useful means of accessing the Nasdaq-100 performance.

For individuals who want to access the United States globally but maintain costs within reach, this fund offers an effective avenue into the U.S. market.

[Read: Is It Worthwhile Adding International Mutual Funds to an Investment Portfolio?]

#4 - Kotak Nasdaq 100 FOF

Introduced in February 2021, the scheme does not directly invest in U.S. stocks but rather invests its assets in the iShares NASDAQ-100 UCITS ETF, a European-listed exchange-traded fund (ETF).

In contrast to some other Indian Nasdaq 100 FoFs that invest in U.S.-based ETFs, this fund's exposure through a UCITS-compliant ETF has the advantage of strict European regulations, increased liquidity, and possible tax efficiency because of the domicile of the ETF. Thus, It is a good option for investors wishing to add international exposure to their India-focused portfolio.

#5 - Motilal Oswal Nasdaq 100 ETF

Motilal Oswal NASDAQ 100 ETF is India's first exchange-traded fund (ETF) that tracks the NASDAQ-100 Index directly, providing investors with a low-cost means to gain exposure to the leading 100 non-financial businesses listed on the Nasdaq.

In contrast to Fund of Funds (FoFs), this ETF invests directly in the stocks that make up the NASDAQ-100, without adding the extra cost layer that comes from investing in an underlying international fund. It is listed on Indian stock exchanges, making it available to retail and institutional clients seeking direct exposure to U.S. equities through a low-cost passive investment strategy.

It has given great returns over the years, riding the high growth of U.S. technology stocks. However, as it tracks a foreign index, its performance is also vulnerable to currency fluctuations, where a falling rupee can boost returns for Indian investors, and a rising rupee can cut into gains.

To conclude...

Although these investments have yielded significant returns over time, they carry risks associated with global market movements, economic policies, and currencies. As the U.S. economy is influenced by changes based on new directions in policy, investors need to be aware of macroeconomic events that may influence Nasdaq-traded companies.

As the global economy continues to change, Nasdaq 100 funds can be a strategic complement to a well-diversified portfolio, allowing investors to ride global market trends while hedging against risks through effective diversification.

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MITALI DHOKE is a Research Analyst at PersonalFN, specializing in mutual fund research, including NFOs. With 4.5 years of experience in financial services, she serves as the editor of FundSelectPlus, PFN's flagship research service and assists for Model Portfolio Products.
With an MBA in Finance and an M.Com, she combines analytical rigor with industry knowledge to craft insightful articles for Daily Wealth Letter, a widely followed newsletter reaching over 1.5 lakh PFN subscribers. She also contributes to PersonalFN’s Youtube Channel, developing insightful videos on mutual funds, investor education, and financial awareness.
 

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.