Zerodha launches NiftyLargeMidcap 250, ELSS Tax Saver index funds

Zerodha Fund House on Wednesday launched its maiden funds Zerodha Nifty LargeMidcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund. Both the funds are open-ended, passive, index equity mutual fund schemes and the NFO will be open from October 20, 2023 to November 3, 2023.

"Zerodha Fund House is a joint venture between India's largest stock broking firm Zerodha Broking Limited and a leading portfolio investing platform, smallcase Technologies Pvt Ltd. Zerodha Fund House (ZFH) is India’s only passive-only AMC which will build simple, transparent, affordable mutual funds. ZFH will leverage technology at every touchpoint to provide building blocks for every investor's portfolio," Zerodha Fund House said.

The Index Fund is an open-ended scheme replicating Nifty LargeMidcap 250 Index. And 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 LargeMidcap 250 Index. Zerodha Nifty LargeMidcap 250 Index Fund & Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund will be benchmarked against the Nifty LargeMidcap 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 ELSS scheme provides tax benefit under Section 80 (C) of the Income-tax Act, 1961.

“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 who stand to benefit from the long-term growth of the Indian economy,” said Vishal Jain, CEO, Zerodha Fund House.

The Nifty LargeMidcap 250 Index aims to reflect the performance of the large and midcap companies listed at NSE with 50 per cent weight allocated to each segment. The 250 stocks of Nifty LargeMidcap 250 Index are the combination of the universe of stocks forming part of Nifty 100 Index and Nifty Midcap 150 Index.

The Nifty LargeMidcap 250 Index covers approximately 84 per cent of the full market capitalization, around 87 per cent of the free-float market capitalization and approximately 69 per cent of the total liquidity of all traded equity stocks on NSE based on six month average as of September 29, 2023
The largest sectors in Nifty LargeMidcap 250 Index are Financial Services (27.74 per cent), Information Technology (9.06 per cent) and Capital Goods (7.89 per cent). Being a balanced fit between the Nifty 100 and the Nifty Midcap 150 index, the Nifty LargeMidcap 250 index witnessed returns between the Nifty 100 and Nifty Midcap 150 index.
Since inception on April 01, 2005, till September 29, 2023, 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, Zerodha Fund House said
The Nifty LargeMidcap 250 index has not witnessed negative returns in the 7 year and 10 year investment horizons, based on daily rolling return analysis, the fund house added.