Zerodha Mutual Fund
Zerodha Mutual Fund
Introduction to Zerodha Mutual Fund
Zerodha Mutual Fund, also known as Zerodha Fund House, is a fresh and distinct entrant in the Indian mutual fund industry. It is a joint venture between Zerodha Broking Limited, India's largest stockbroker by active clients, and smallcase, a well-known platform for thematic and diversified portfolios of stocks and ETFs.
Zerodha Mutual Fund was established on August 11, 2023, with the Asset Management Company (AMC), Zerodha Asset Management Private Limited, incorporated in December 2021. This marks a strategic expansion for Zerodha beyond stockbroking, aiming to bring its philosophy of simplicity, transparency, and cost-effectiveness to the mutual fund space.
Zerodha Fund House's investment philosophy is notably passive-only. This sets them apart from most traditional AMCs that primarily offer actively managed funds. Their core belief is that for most investors, index-based investing is the most efficient, transparent, and cost-effective way to participate in markets. They believe:
- Active stock picking is challenging: Consistently outperforming the market through active stock selection is difficult for the vast majority of fund managers.
- Diversification and Cost-Effectiveness: Passive funds offer broad market exposure, minimize human biases, and come with significantly lower expense ratios compared to actively managed funds.
- Long-term wealth creation: By simply tracking the market, investors can capture long-term market returns without the complexities and higher costs associated with active management.
Their mission is to make investing truly simple, affordable, and democratic, leveraging their technological prowess to offer straightforward, low-cost index funds and ETFs.
Fund Managers
As a passive-only fund house, the role of "fund managers" at Zerodha Mutual Fund differs from that of traditional actively managed funds. Their focus is on accurately tracking indices and managing the passive products efficiently.
Key personnel at Zerodha Mutual Fund include:
- Mr. Vishal Jain: Chief Executive Officer (CEO). He brings over 25 years of experience in building ETFs and passive investment products and leads the overall strategy for Zerodha Fund House.
- Mr. Kedarnath Mirajkar: Fund Manager and Dealer (TREPS). He manages various equity and commodity index and ETF funds.
- Mr. Shyam Agarwal: Fund Manager and Dealer (Equity & TREPS). He is also involved in managing funds.
While these individuals are designated as fund managers, their primary role is ensuring the efficient and accurate replication of chosen indices, rather than active stock selection or market timing.
Scope of Zerodha Mutual Fund
The scope of Zerodha Mutual Fund is very specific and focused on its passive-only philosophy:
- Pure Passive Investing: Their primary offering is index funds and Exchange Traded Funds (ETFs). This means they do not engage in active stock picking, sector rotation, or market timing to beat the benchmark. Instead, they aim to mirror the performance of specific market indices.
- Low Cost: A significant part of their scope is to offer mutual funds with extremely low expense ratios, making investing more affordable for the masses. This aligns with Zerodha's overall philosophy of low-cost broking.
- Simplicity and Transparency: Their focus is on creating simple, easy-to-understand funds that are transparent in their holdings and methodology, aiming to demystify mutual fund investing.
- Core Market Exposure: Their funds are designed to provide core exposure to various market segments (large-cap, mid-cap) and asset classes (equity, debt, commodities like gold and silver) through index replication.
- Long-Term Wealth Creation: They advocate for a disciplined, long-term approach to investing through diversified, low-cost passive vehicles.
- Leveraging Zerodha's Ecosystem: They benefit from Zerodha's vast client base and technological infrastructure, aiming for seamless integration within the Zerodha ecosystem (e.g., via the Coin platform for direct mutual fund investments).
- Focus on Investor Education: Aligned with Zerodha's "Varsity" initiative, they emphasize educating investors about the benefits of passive investing and financial planning.
List of All Funds with Brief Explanation (Prominent Schemes)
As a relatively new AMC focusing on passive investments, Zerodha Mutual Fund has a concise and growing list of schemes. Here are some of their prominent offerings:
Equity Index Funds:
- Zerodha Nifty LargeMidcap 250 Index Fund:
- Explanation: An open-ended index scheme that aims to track the performance of the Nifty LargeMidcap 250 Index. This index comprises the top 100 large-cap and top 150 mid-cap companies, providing diversified exposure across these two significant market segments.
- Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund:
- Explanation: An Equity Linked Savings Scheme (ELSS) with a 3-year statutory lock-in period. It tracks the same Nifty LargeMidcap 250 Index as the non-tax-saver version, offering investors tax benefits under Section 80C along with broad equity market exposure through a passive approach.
Commodity ETFs and FoFs (Fund of Funds):
- Zerodha Gold ETF (GOLDCASE):
- Explanation: An Exchange Traded Fund that aims to track the domestic price of physical gold. It provides a convenient and cost-effective way to get exposure to gold as an asset class without the need to hold physical gold.
- Zerodha Gold ETF FoF:
- Explanation: An open-ended fund of fund scheme that invests its assets primarily in units of the Zerodha Gold ETF. This allows investors to gain exposure to gold through a mutual fund route without needing a demat account for the ETF itself.
- Zerodha Silver ETF (SILVERCASE):
- Explanation: An Exchange Traded Fund that aims to track the domestic price of physical silver. It provides a convenient way to invest in silver.
- Zerodha Silver ETF FoF:
- Explanation: An open-ended fund of fund scheme that invests primarily in units of the Zerodha Silver ETF, offering indirect exposure to silver through a mutual fund structure.
Debt Funds (Liquid/Overnight):
- Zerodha Overnight Fund:
- Explanation: An open-ended debt scheme that invests in overnight instruments (maturing in one business day). It offers maximum liquidity and minimal interest rate risk, suitable for extremely short-term parking of funds, like an emergency fund.
- Zerodha Nifty 1D Rate Liquid ETF (LIQUIDCASE):
- Explanation: An Exchange Traded Fund that aims to track the Nifty 1D Rate Index, reflecting returns from overnight money market instruments. It provides high liquidity and is suitable for managing idle cash.
Equity ETFs (Other):
- Zerodha Nifty Midcap 150 ETF (MID150CASE):
- Explanation: An Exchange Traded Fund that aims to track the Nifty Midcap 150 Index, providing exposure to the top 150 mid-sized companies in India.
- Zerodha Nifty 100 ETF (TOP100CASE):
- Explanation: An Exchange Traded Fund that aims to track the Nifty 100 Index, providing exposure to the top 100 large-cap companies in India.
Given their relatively recent entry and their stated focus on a lean product offering, Zerodha Mutual Fund is expected to gradually introduce more passive products that align with their core philosophy.
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