PPFAS GIFT S&P 500, Nasdaq 100 NFO; when will unit allotment happen?

These funds, with a minimum investment of USD 5,000, open a new way for Indian investors to participate in major U.S. stock markets without the need to open foreign brokerage accounts. They are structured to primarily invest in ETFs that track the S&P 500 and Nasdaq 100 indexes, respectively, thereby bringing broad exposure to large-cap U.S. stocks and leading technology companies to investors through a simple and compliant route.

Parag Parikh IFSC S&P 500 FOF Fund of Fund seeks to track the performance of the S&P 500 Index, which comprises approximately 500 of the largest publicly traded companies in the United States.

Parag Parikh IFSC Nasdaq 100 FOF Fund of Fund seeks to provide exposure to the Nasdaq-100 Index, which includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, with major representation from technology and other innovation-driven sectors.

Taxation

Investors should be aware that the tax structure of these funds differs from that of international mutual funds. The Scheme will disclose two post-tax NAVs – Long-term post-Tax NAV and Short-term post-Tax NAV. If the tax rates of 12.5% and 30% (plus applicable surcharge and cess) have already been paid at the fund house level, what will be the tax rate applicable to investors when selling units?

Nirmal Bari, Principal Officer, PPFAS GIFT, says, “The schemes launched by PPFAS GIFT are retail schemes. At present, retail schemes in GIFT City are required to pay taxes at the scheme level as a representative assessee, similar to CAT-III AIFs.

The tax rate applicable to the scheme for long-term holding of more than 2 years is the long-term capital gains tax 12.5%+ surcharges, which amounts to 14.95%, and for short-term it would be the maximum marginal rate of 42.74%.”

But what will be the applicable NAV on buying and selling? “To create sufficient provision for these taxes and provide clarity to investors on what redemption proceeds they would receive, the scheme will disclose two post-tax NAV – Long Term post-Tax NAV which will be used for Subscriptions as well as redemptions beyond 2 years of holding period and Short term post-tax NAV which will be used for redemptions only if the investor is looking to redeem within 2 years of allocation of units to them.

Since the taxes on income earned by the Scheme are discharged at the Scheme level, any gains on transfer of units of the Scheme will not be again taxed in the hands of the investors,” adds Bari.

When Will Allotment Happen

Many investors invest during the NFO period, while some wait for the scheme to reopen for regular subscriptions. For long-term investors looking to avail RBI’s LRS facility, here’s what Bari has to say – NFO closing for the schemes is 16th March, 2026, and unit allotment will probably take a few days more than the domestic mutual funds, given the complex reconciliation of international remittance. It will likely reopen after the end of March. So for any Individual looking to utilize their current financial year LRS limit and invest in these funds, the most optimum time is before the NFO closes.

Suitability

These funds help bring in exposure to US stock market stocks through the two leading indices – the S&P 500 and the tech-heavy Nasdaq 100. “These funds are suitable for any resident Indian Individual (including minors represented by the guardian) or eligible non individual Indian entity (company, LLP or registered partnership firm) who are looking to build global diversification through low cost index exposure through simple products similar to Indian mutual funds; Investors looking to build a dollar denominated portfolio without taking on the risk associated with foreign investing such as – Estate Tax, Lack of Nomination etc. Investors should have a long-term horizon while looking at such products,” says Bari.