Investors have yet another international passive investment option to choose from. Navi Mutual Fund has announced the launch of Navi US Total Stock Market Fund of Fund (FoF). The fund 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 cent per annum. The NFO will open for subscription on February 4, 2022.

Vanguard Total Stock Market ETF (VTI) tracks the CRSP US Total Market Index which comprises 4000+ stocks, representing nearly 100 per cent of the investable equity US market. Though the fund invests in US equities of all sizes - large, mid, small and micro capitalisation, 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-focussed 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, a statement from NAVI MF said.

The broad-based US index has provided an annualised return (in INR terms) of 28.15 per cent, 20.11 per cent and 20.27 per cent over the last 1 year, 5 years and 10 years respectively (as of Dec 31, 2021). Besides this, a low correlation between the equity markets of US and India and potential appreciation of Dollar against Rupee provides the Indian investor with a simple, low cost and well-diversified solution to include US equities in their investment portfolios, according to NAVI MF.

Commenting on the new fund, Sachin Bansal, co-founder of the Navi Group said, "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."

This will be the third fund launched by Navi Mutual Fund this year, continuing its focus on passively-managed schemes. It launched the Navi Nifty Next 50 Index Fund and Navi Nifty Bank Index Fund in January, both of which are lowest cost index funds, as on date, in their respective categories. The fund house plans to launch 3 more funds by the end of March this year.

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