Navi Mutual Fund has announced the launch of Navi US Total Stock Market Fund of Fund. It will invest in Vanguard Total Stock Market ETF, which is one of the largest passively managed US-based ETFs. The Fund’s Expense Ratio will currently be 0.06% per annum, Navi MF said in a statement.
The NFO will open for subscription on 4th February 2022.
Navi MF said that the Vanguard Total Stock Market ETF (VTI) tracks the CRSP US Total Market Index comprising over 4000 stocks and representing nearly 100 percent 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 well-diversified, comprehensive and broader index having exposure to multiple sectors. 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 statement said.
Navi MF’s statement said that the broad-based US index has provided an annualised return (in INR terms) of 28.15%, 20.11% and 20.27% over the last 1 year, 5 years and 10 years respectively (as of December 31, 2021).
It further said that a low correlation between the equity markets of US and India and potential appreciation of Dollar against Rupee may provide the Indian investor with a simple, low cost and well-diversified solution to include US equities in their investment portfolios.
“Navi is excited to be able to give Indian investors an opportunity to invest in Vanguard, a global pioneer of the low-cost index fund. 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,” Sachin Bansal, Co-founder of the Navi Group said.
3 more funds
This is the third fund to be launched by Navi Mutual Fund this year. Earlier this month, Navi MF had launched the Navi Nifty Next 50 Index Fund and Navi Nifty Bank Index Fund. The fund house plans to launch 3 more funds by the end of March this year.