Fund Overview
Fund House: Zerodha Asset Management Company
Category: Fund of Funds (FoF) – Multi Asset
Type: Passive (Invests in passive index funds/ETFs)
Direct Plan: Yes (Lower expense ratio)
Growth Option: Automatically reinvests returns for compounding
Investment Objective & Strategy
Primary Goal: Generate long-term capital appreciation by investing in passive index funds/ETFs across three asset classes:
- Equity (Nifty 50, Nifty Next 50)
- Debt (Liquid/Gilt funds)
- Gold (Gold ETFs)
Asset Allocation:
| Asset Class | Allocation Range |
|---|---|
| Equity | 65-80% |
| Debt | 10-25% |
| Gold | 5-15% |
Passive Strategy:
- Zero active stock-picking.
- Mirrors underlying index funds.
- Rebalanced quarterly to maintain target allocation.
Key Metrics
| Parameter | Details |
|---|---|
| Expense Ratio | 0.20% (Direct Plan) + underlying fund expenses (0.05-0.10%) |
| Exit Load | 1% if redeemed within 30 days; Nil after |
| Stamp Duty | 0.005% on investments (₹50 per ₹1 lakh) |
| Minimum Investment | ₹100 (Lump Sum), ₹500/month (SIP) |
| Benchmark | Custom (65% Nifty 50 TRI + 25% CRISIL Liquid TRI + 10% Domestic Gold) |
Taxation
| Holding Period | Equity Component | Debt/Gold Component |
|---|---|---|
| Short-Term (<1 yr) | 15% STCG | Slab Rate |
| Long-Term (>1 yr) | 10% LTCG (above ₹1 lakh) | 20% with indexation |
Note: FoFs do not qualify for equity taxation. Entire gains taxed as per underlying assets.
Fund Management & House Credibility
Fund Manager:
- Vishal Jain (Head of Passive Investments)
- Ex-CEO of Edelweiss Gold ETF.
- 15+ years in passive fund management.
- Manages Zerodha’s entire passive suite (Nifty 100, Gold ETF).
Zerodha AMC:
- Launched in 2024, backed by India’s largest brokerage.
- AUM: ₹2,500+ crore (passive funds as of 2025).
- Philosophy: “Low-cost, transparent, tech-first investing.”
Why This Fund? Unique Advantages
- Cost Efficiency:
- Direct Plan saves 0.5-1% vs. Regular plans.
- Lowest expense ratio in multi-asset category.
- Auto-Rebalancing:
- Maintains target allocation without manual intervention.
- Diversification:
- Reduces risk via uncorrelated assets (equity, debt, gold).
- Zero Timing Risk:
- Passive strategy eliminates fund manager bias.
Who Should Invest?
| Investor Profile | Why Suitable? |
|---|---|
| Beginners | Simple, hands-off diversification. |
| Retirees | Stability with gold/debt + equity growth. |
| Goal-Based Savers | Ideal for 5-7 year goals (child education, home down payment). |
| Tax Savers | LTCG benefits after 1 year. |
Performance Insights & Risks
Expected Returns (Historical Context):
- Equity (Nifty 50): 12-14% CAGR (10-year avg).
- Debt: 6-7% CAGR.
- Gold: 8-10% CAGR.
Projected Portfolio CAGR: 10-11%.
Risks to Note:
- Market Volatility: Equity/gold fluctuations affect short-term returns.
- Interest Rate Sensitivity: Debt NAV falls when rates rise.
- Currency Risk: Gold prices tied to USD/INR movement.
How to Invest
Step-by-Step Process:
- Complete KYC: PAN + Aadhaar (in-person verification).
- Choose Platform:
- Zerodha Coin app (direct).
- MF utilities (CAMS/KFin).
- Select SIP/Lump Sum
- Monitor: Track via Zerodha Console or CAS emails.
Expert Verdict
Strengths:
- Lowest cost in category.
- Backed by Zerodha’s tech infrastructure.
- Ideal for “set-and-forget” investors.
Limitations:
- Limited track record (fund launched in 2024).
- No active downside protection.
Final Recommendation: A compelling choice for passive investors seeking diversified exposure. Prioritize if cost efficiency and simplicity top your criteria. Avoid if you prefer active management or tactical asset shifts.
