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Navi MF to launch US Total Stock Market FoF with expense ratio of 0.06%

Sachin Bansal-backed Navi Mutual Fund plans to launch three more funds by the end of March this year.Premium
Sachin Bansal-backed Navi Mutual Fund plans to launch three more funds by the end of March this year.

  • This will be the third fund launched by Navi Mutual Fund this year, continuing its focus on passively-managed schemes. It launched the Navi Nifty Next 50 Index Fund and Navi Nifty Bank Index Fund in January, both of which are lowest cost index funds, as on date, in their respective categories

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NEW DELHI: Sachin Bansal-backed Navi Mutual Fund has announced the launch of US Total Stock Market Fund of Fund (FoF), which will have among the lowest expense ratios in the industry of 0.06% per annum. The scheme will invest in Vanguard Total Stock Market Exchange-Traded Fund (ETF), one of the largest passively managed US-based ETFs.

The new fund offer (NFO) for Navi US Total Stock Market Fund of Fund will open for subscription on 4 February.

Vanguard Total Stock Market ETF (VTI) tracks the CRSP US Total Market Index which comprises over 4,000 stocks, representing nearly 100% of the investable equity US Market. Though the fund invests in US equities of all sizes - large, mid, small and micro capitalization, it has a considerable allocation to the most popular names such as Apple, Microsoft, Alphabet, Amazon, Facebook and Tesla.

CRSP US Total Market Index, the benchmark for the Vanguard ETF, is a diversified index having exposure to multiple sectors.

As per the fund house, in contrast, most of the US-focused index funds currently offered by other mutual fund houses in India have NASDAQ 100 Index as their benchmark, which has a higher exposure to the technology sector.

The broad-based US index has provided an annualized return (in rupee terms) of 28.15%, 20.11% and 20.27% over the last one year, five years and 10 years, respectively (as of 31 December).

Commenting on the new fund, Sachin Bansal, co-founder of the Navi Group, said, “The Navi US Total Stock Market Fund of Fund will, for the first time, give Indian retail investors a convenient and low-cost means to participate in the entire US stock market. Our goal is to keep providing new investment opportunities to investors at the best possible cost."

This will be the third fund launched by Navi Mutual Fund this year, continuing its focus on passively-managed schemes. It launched the Navi Nifty Next 50 Index Fund and Navi Nifty Bank Index Fund in January, both of which are lowest cost index funds, as on date, in their respective categories. The fund house plans to launch three more funds by the end of March this year.

As per the fund house, the expense ratio is subject to change from time to time within the overall permissible expense ratio of 1%.

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