Zerodha launches Nifty Smallcap 100 ETF: Should you invest?
What's the story
Zerodha Mutual Fund has launched the Zerodha Nifty Smallcap 100 ETF, an open-ended scheme that replicates the Nifty Smallcap 100 Total Return Index. The New Fund Offer (NFO) is now open for subscription and will close on September 5. After this period, the fund will be available for continuous sale and repurchase within five business days from unit allotment under the NFO.
Fund details
ETF eyes returns similar to Nifty Smallcap 100 Index
The Zerodha Nifty Smallcap 100 ETF aims to invest in stocks of the Nifty Smallcap 100 Index in the same proportion as in the index. This is done to achieve returns equal to those of the Total Return Index of Nifty Smallcap 100 Index (subject to tracking error). The fund will be benchmarked against NIFTY Smallcap 100 TRI and managed by Kedarnath Mirajkar.
Allocation
Investment strategy and asset allocation
The Zerodha Nifty Smallcap 100 ETF will invest 95-100% in equities and equity-related securities of the Nifty Smallcap 100 Index. It will also invest up to 5% in debt and money market instruments, cash, and cash equivalents. This passively managed ETF aims to minimize tracking error through regular portfolio rebalancing based on changes in stock weights within the index, as well as incremental collections/redemptions within the scheme.
Investor access
How to buy/sell Zerodha Nifty Smallcap ETF?
The units of the Zerodha Nifty Smallcap 100 ETF can be bought/sold on all trading days on the NSE or BSE, where it is listed. There is no exit load for this scheme. However, investors should note that their principal investment in this fund will be at "very high" risk according to the fund's riskometer.