Zerodha Fund House has introduced a new scheme. The name of this scheme is Zerodha BSE Sensex Index Fund. It is an open-ended scheme. This New Fund Offer (NFO) opened on 20 October. Investments can be made in this till November 3. After that one will have to invest in this scheme at its NAV. This scheme will track BSE Sensex. After closing of NFO, investment in this scheme will have to be made at its NAV.
This fund will invest in shares of 30 companies included in BSE Sensex.
Zerodha BSE Sensex Index Fund Will invest mainly in equity and equity related securities. This means that most of the investments of this fund will be in shares of companies included in BSE Sensex. Sensex includes 30 companies. These are the top 30 companies of India according to market capitalization. Investors can invest in this scheme during NFO through major platforms for investing in mutual funds.
Investors can create a diversified portfolio with the help of this scheme.
Vishal Jain, CEO, Zerodha Fund House, said, “BSE Sensex is India’s first stock market index. It includes big companies from many sectors. This index has seen many ups and downs in the Indian markets. These include the beginning of the Internet, the mobile phone revolution, the financial crisis of 2008 and the rise of the digital economy in India.” He said that this fund will give investors an opportunity to invest in big companies of the country and create a diversified portfolio.
Index funds use passive strategies for investing.
This is an index fund. Such funds are also called passive funds. Index funds do not have a fund manager. This is because index funds invest investors’ money in the shares of companies included in the index that it tracks. Zerodha BSE Sensex Index Fund will track Sensex. Since this fund does not use active strategy for investment, its expense ratio is lower than actively managed funds.
There are already funds tracking Sensex in mutual fund markets.
There are already many index funds in the mutual fund market, which track the Sensex. These include UTI BSE Sensex Index Fund, HDFC BSE Sensex Index Fund, SBI BSE Sensex Index Fund and Tata BSE Sensex Index Fund. The returns of an index fund are close to the index it tracks. Investing in index funds can also be done through SIP. This means that a fixed amount can be invested on a fixed date every month.
Should you invest in this fund?
Experts say that investors should invest in an index fund after looking at their investment portfolio. Investors who have not invested in largecap equity funds can invest in Zerodha BSE Sensex Index Fund. If an investor already has large cap funds in his portfolio then it is not necessary for him to invest in this scheme. However, it would be better for experts to take advice from investment advisors in this regard.