Zerodha Fund House, which is a joint venture between broking firm Zerodha Broking Limited and portfolio investing platform smallcase Technologies Pvt Ltd, on Wednesday said it has launched its maiden funds - Zerodha Nifty Large Midcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty Large Midcap 250 Index Fund. These funds are open-ended, passive, index equity mutual fund schemes. The NFO has opened from October 20 and will be there till November 3.
In September, Zerodha Fund House filed draft documents with the Securities and Exchange Board of India (Sebi) for the launch of its schemes after getting a final approval from the markets regulator in August to launch mutual fund schemes.
The Index Fund is an open-ended scheme replicating Nifty Large Midcap 250 Index. The Nifty Large Midcap 250 reflects the performance of a portfolio of 100 large cap and 150 mid cap companies listed on NSE, represented through the Nifty 100 and the Nifty Midcap 150 index respectively.
On the other hand, the ELSS is an open-ended passive equity linked savings scheme with a statutory lock-in period of 3 years and tax benefit replicating Nifty Large Midcap 250 Index. The Nifty Large Midcap 250 reflects the performance of a portfolio of 100 large cap and 150 mid cap companies listed on NSE, represented through the Nifty 100 and the Nifty Midcap 150 index respectively.
The Nifty Large Midcap 250 Index covers approximately 84 per cent of the full market capitalisation, around 87 per cent of the free-float market capitalisation and approximately 69 per cent of the total liquidity of all traded equity stocks on NSE based on 6-month average as of September 29.
The largest sectors in Nifty Large Midcap 250 Index are Financial Services (27.74 per cent), Information Technology (9.06 per cent) and Capital Goods (7.89 per cent).
Since inception on April 01, 2005, till September 29, the Nifty LargeMidcap 250 Index has delivered 15.8 per cent CAGR as compared to 14.5 per cent CAGR by Nifty 100 Index and 17.3 per cent CAGR by Nifty Midcap 150 Index.
The Nifty Large Midcap 250 index has not witnessed negative returns in the 7-year and 10-year investment horizons.
Zerodha Nifty Large Midcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty Large Midcap 250 Index Fund will be benchmarked against the Nifty Large Midcap 250 Index TRI (Total Returns Index).
The schemes will adopt a passive investment strategy and will endeavour to invest in stocks in proportion to the weightage of the stocks in the Nifty LargeMidcap 250 Index, the company said in a notification.
The ELSS scheme will offer tax benefit under Section 80 (C) of the Income-tax Act, 1961.
The minimum application amount for Zerodha NIFTY LargeMidcap 250 Index Fund is Rs 100/- and Rs. 500/- for Zerodha Tax Saver (ELSS) Nifty LargeMidcap 250 Index Fund. Zerodha FH has appointed Kedarnath Mirajkar as the fund manager.
"We are very excited to announce the launch of our first NFO. We believe there is a massive opportunity to help more Indians access the capital markets through simple products and exposures, and that's what we're committed to do. This NFO is an effort to provide a simple equity product with a good mix of stability and growth, which can be used by investors as a singular investment solution to invest in the top 250 companies that stand to benefit from the long-term growth of the Indian economy,” said Vishal Jain, CEO, Zerodha Fund House.
Zerodha Fund House is the only passive-only AMC in India, which aims to build simple, transparent, affordable mutual funds by leveraging technology at every touchpoint to provide building blocks for every investor's portfolio.