Discount brokerage company Zerodha has submitted paperwork to the Securities and Exchange Board of India (Sebi) to introduce two passive funds, nearly a month after getting approval to begin operating its asset management operation.
Both funds are called Zerodha Nifty LargeMidcap 250 Index Fund and Zerodha Tax Saver (ELSS) Nifty LargeMidcap 250 Index Fund.
They both follow the Nifty LargeMidcap 250 Index Fund and are passive index funds.
A statutory lock-in term of 3 years applies to the open-ended passive equity-linked savings plan known as the Zerodha Tax Saver Nifty LargeMidcap 250 Index Fund.
The fund will invest in the same proportion of Nifty LargeMidcap 250 index equities as the index, while also providing an 80C income tax benefit for such investments.
Another open-ended, but conventionally diversified, open-ended strategy is the Zerodha Nifty LargeMidcap 250 index fund. The scheme’s corpus will be invested in debt, money market securities, equity-related instruments, and other authorised instruments.
The capital market regulator gave Zerodha, owned by Nikhil Kamath, final approval in August to begin operating as an asset management company.
In collaboration with Smallcase, an internal corporate fund of Zerodha called Rainmatter, the asset management firm Zerodha Asset Management was established.
Zerodha and Smallcase both declared in April that they would join forces to establish the Zerodha AMC company.
Vishal Jain has been chosen by the corporation to lead its AMC division. Jain was a mutual fund manager at Nippon India before joining Zerodha AMC.
95–100% of the money will be allocated to equities and equity-related instruments covered by the Nifty LargeMidcap 250 index fund under the tax-saving programme. The money will be divided up to 5% between debt and money market instruments.