Sachin Bansal’s Navi Mutual Fund launches Nifty 50 Index Fund with ‘lowest’ expense ratio: Should you invest?

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Updated: June 28, 2021 1:27 PM

Sachin Bansal's Navi Mutual Fund today (June 25, 2021) announced the launch of Navi Nifty 50 Index Fund, which is an open-ended equity scheme that would replicate the Nifty 50 Index

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Sachin Bansal’s Navi Mutual Fund today (June 25, 2021) announced the launch of Navi Nifty 50 Index Fund. The new fund is an open-ended equity scheme that would replicate the Nifty 50 Index, with the “lowest cost” compared to any other index schemes in the passive funds category, Navi Mutual Fund said in a statement. The new low-cost index fund has been launched at a time when many AMCs have been steeply hiking their expense ratios.

Investment objective: Navi Mutual Fund said that the investment objective of the scheme is to achieve returns equivalent to Nifty 50 Index by investing in stocks of companies comprising Nifty 50 Index, subject to tracking error.

The 0.06% expense ratio has been proposed to be charged by the fund for its direct plan offering. It is the lowest in the index schemes category so far, Navi Mutual Fund said in a statement.

For index funds, the category average expense ratio is 0.25% and many existing index funds are charging expense in the range of 0.15% to 0.20%.

ALSO READ | New fund offers a chance to become permanent resident in Europe for Rs 3.09 crore!

Should you invest? 

Navi Mutual Fund’s new scheme would be suitable for investors who are seeking long-term capital appreciation, investment in securities covered by Nifty 50 Index and access to the growth of market leaders.

Key dates

The 10-day NFO will open on 3rd July 2021 and close for subscriptions on 12 July 2021.

Commenting on the new fund, Saurabh Jain, MD and CEO, Navi AMC Limited said, “All funds have professional portfolio managers. With an index fund, investors don’t need to pay more for getting the expertise to hand-pick stocks. The real benefit to the investor is brought by lowering the expense ratio while still providing the same quality professional portfolio management through index funds. Working with our partners and leveraging our technology background, Navi has lowered the cost to 0.06% for the direct plan offering, which is the lowest in the index schemes category, as of today. Our goal is to be able to keep providing investment opportunities to investors at the best possible cost.”

Navi Mutual Fund is a part of Sachin Bansal’s BFSI group Navi. Apart from mutual funds, Navi offers a range of financial services and products such as personal loans, housing loans and health insurance.

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