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

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

The New Fund Offering (NFO) for Navi US Total Stock Market Fund of Fund will open for subscription on February 4.

Vanguard Total Stock Market ETF (VTI) tracks the CRSP US Total Market Index, which includes more than 4,000 stocks, representing nearly 100% of the US investable stock market. Although the fund invests in US stocks of all sizes – large, mid, small and micro caps, it has a considerable allocation to the most popular names such as Apple, Microsoft, Alphabet, Amazon, Facebook and Tesla.

The CRSP US Total Market Index, the benchmark of the Vanguard ETF, is a diversified index exposed to several sectors.

According to the fund company, on the other hand, most US-focused index funds currently offered by other mutual fund companies in India have the NASDAQ 100 index as their benchmark, which has a higher exposure to the technology sector.

The broad US index has provided an annualized return (in rupees) of 28.15%, 20.11% and 20.27% over the past year, five years and 10 years, respectively (as of December 31).

Commenting on the new fund, Sachin Bansal, Co-Founder of Navi Group, said: “The Navi US Total Stock Market Fund of Fund will, for the first time, offer Indian retail investors a convenient and low-cost way to participate in the entire US stock market. Our goal is to continue to offer new investment opportunities to investors at the best possible cost.”

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

According to the fund house, the expense ratio is subject to change from time to time within the permitted overall expense ratio of 1%.

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Sallie R. Loera