Navi MF to launch US Total Stock Market FoF with an expense ratio of 0.06%

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

The Vanguard Total Stock Market ETF (VTI) tracks the CRSP US Total Market Index which includes over 4,000 stocks, representing nearly 100% of the investable equities US market. Although the fund invests in US stocks of all sizes – large, medium, small and micro-capitalization, it has considerable allocations for the most popular names such as Apple, Microsoft, Alphabet, Amazon, Facebook and Tesla.

The CRSP US Total Market Index, the benchmark for the Vanguard ETF, is a diversified index with exposure to multiple sectors.

In contrast, most US-focused index funds currently offered by other mutual fund houses in India have the NASDAQ 100 index as their benchmark, which has high exposure to the technology sector, according to the fund house.

The broad-based US index has provided annual returns (in rupee terms) 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, Navi Group, said, “The Navi US Total Stock Market Fund of Fund will provide for the first time Indian retail investors a convenient and low-cost instrument to participate in the entire US stock market. We aim to continue to provide investors with new investment opportunities at the best possible cost.”

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

As per the fund house, the expense ratio is subject to change from time to time within the overall permissible expense ratio of 1%.