Zerodha Fund House, a recent entrant in the mutual fund industry, has made impressive strides, nearing ₹3000 crore in assets under management in less than 1 year. With 6 passive funds in its lineup, Zerodha Fund House is already outperforming expectations.
We’re thrilled to host an exclusive AMA with the man behind this success, Mr. @Vishal_Jain_ZFH, CEO of Zerodha Fund House!
This is your chance to engage directly with one of the leaders in the AMC space and get all your questions answered. Whether you’re curious about mutual funds, passive investing, ETFs, fund management strategies, investment philosophies, or trading tactics, bring your questions to the table!
Please post your questions in this thread, and Vishal Jain will be responding to them throughout the day tomorrow. Through our MadeForTrade community, we’re offering you a unique opportunity to connect with industry experts and dive deep into the investing world. Don’t miss this chance to learn from the best!
Questions will be accepted until tomorrow : 17th September —don’t miss out!
Update: To accommodate more questions ZFH fund managers- Kedarnath Mirajkar & Apurv Parikh would be assisting him with queries as well! Keep them coming.
With Liquidbees being a popular choice among investors for short-term parking of funds and cash management, what differentiates Zerodha Fund House’s approach to liquid ETFs?
Namste Sir,
How to select ETF for long trem investment (which etf to invest)
How to choose ETF and mutual fund in terms of long term investment (which one is best from the long term prospective)
Do you think ETF / index fund spaces are saturated currently from lot of other industry leaders and products from late entrants to this ETF / index fund space will be like one among many and fail to get traction among investors?
Are there any plans from ZFH to make something like ishares Lifepath Target Date ETFs/ Funds but using investable Indian segments (for someone who reads this question and doesn’t know what it is, they’re basically passive funds using S&P500, S&P400, S&P600 ETFs/US Total Market ETFs + US bond ETFs of varying maturities + Exposure to global equities ETFs and different country treasury ETFs like our NPS but more diversified)?
Are you of the opinion that Indian (equity) passive fund environment lacks depth due to converged nature of investable equity universe and every fund house has to play around with just 750 securities for vanilla indices and with 4-5 factor based indices involving only 500 securities and when this investable universe is saturated it has to come up with really a narrow and meme themes/sectors to satisfy customers?
Are there any plans from ZFH to come up with passive debt / fixed-income funds/ETFs (with low TER) in coming days for different durations as well as taking bonds of particular kind (say GILTs only, corporate bonds only)?
Do you feel if AMCs won’t come up with bunch of products (like set of index funds pertaining to Largecaps, Midcaps, Smallcaps, Microcaps or set of funds pertaining to different factors) altogether but come up with single product at a time then investors would’ve lost interest in those subsequent products and would’ve found other alternatives to make the overall theme of there investment? [Example: Zerodha Nifty LargeMidcap 250 index fund invests 50% in Nifty 100 and 50% in Nifty Midcap 150 universe. But since this index fund didn’t exist from any AMCs i was mimicking same index by investing in say ICICI Nifty 100 Index Fund and ICICI Nifty Midcap 150 Index Fund and when ZFH came up with this index fund i didn’t have to move as there was already a product in place from some other AMC]
a. Unlike active funds have you observed any customer stickiness to AMCs even in passive fund segment if the AMCs won’t innovate any new things? [Example i have saw LIQUIDCASE from ZFH taking a chunk of market space from LIQUIDBEES and other Liquid ETF from other AMCs due to simple thing that most AMCs Liquid ETFs in that space were unit/dividend distributing in nature while ZFH made it growth ETF which in my view was kinda innovation for that space]
b.Likewise how important is it even for passive only funds to keep innovating things and what are the possible edits that could be worked even on existing funds / ETFs?
In your opinion what are the biggest barriers to enter AMC industry for new players & do you think AMCs with a financial institutes tied to it’s name has an advantage to attract customers from it’s parent institute compared to AMCs without a financial institute as it’s parent?
Do you think going forward MF vs PMS/AIF difference would reduce drastically and some of the instruments (say like private equity, private credit) that could be accessed only by HNIs under only certain headings could also be accessed by average networth individuals (or letting even MF industry players to access those under a clear framework)?
Firstly thank you for doing this. I’m constantly following you. Sorry for that.
I want to make mutual fund portfolio in such a way where I have funds from all category like large, mid, small etc,
Q. 1 Should I take this approach of having all categories fund or should I stick to few known categories only?
Q. 2 If yes, I can have all categories of fund in my portfolio. So can you tell me what all type of these categories are?
Last but not the least.
Q. 3 Can you tell me tentative timeline fund wise? Like Large cap - 10-12 years?
Your detailed insight on this will be highly appreciated.
I have seen one video that mutual funds in India don’t disclose the transactions and hence doesn’t trust them.
Do mutual funds invest in equity shares, futures or options to achieve such growth?
I have no questions, but I want to thank you from the bottom of my heart because you are the driving force behind bringing index funds and passive investing to India. Your name will be immortalised on the history page dedicated to passive investment in India as a true Bogle believer. We appreciate your valuable contributions to this once neglected area.
Our focus is on simplifying products and hence we launched LIQUIDCASE which is India’s first growth liquid ETF, where the interest earned by the scheme is reflected in the NAV. This makes LIQUIDCASE relatively easier to track in all aspects and has a low minimum investment value. In addition, LIQUIDCASE has a lower expense ratio as compared to LIQUIDBEES which is something one should consider while deciding.
It’s important to have exposure to passive in your portfolio either in a mutual fund format or an ETF as they are low-cost and transparent. So if you trade regularly and have a demat and trading account, I would suggest going for ETFs. However, if you prefer the SIP route, then index funds would be relatively easier to implement. It’s always better to have a good asset allocation mix across Equity, Debt and Gold and therefore based on your risk profile, you could decide or take help of an advisor.
The difference between the 2 ETFs is that Liquidbees is a dividend paying format & Liquidcase is a Growth format, the investment objective of both the schemes are, generating returns by deploying in TREPS (Repo) with 1 day maturity and the returns would vary based on the daily deployment rate of each scheme. The total expense ratio (TER) plays an important role in returns and the TER of LIQUIDCASE is lower.
For the benefit of all, we will also be conducting a webinar soon with Vishal where we will cover detailed benefits of Liquidcase for traders and investors.
@Vishal_Jain_ZFH will be taking more questions! keep them coming.
Well, its not easy to predict markets in a very short period. In general, ETFs are available across broad-based indices, thematic, strategy indices and you could decide which ETF exposure suits your needs. For investments in ETFs, liquidity and tracking error are important to consider.
Diversification and most importantly asset allocation is necessary. Based on your risk-return profile and financial needs you could decide on the allocation or take advice from an advisor.
Would also be prudent to add Gold and Debt ETFs to your portfolio.
It’s important to note that midcap and most importantly smallcap would carry more risk as compared to the largecap segment and so you could decide your mix accordingly.
Longer the time horizon the better. Rolling return of some broad-based indices in India has shown that in a 7 year period, the chance of a negative return is negligible, so you may consider that.
