Zerodha Fund House launches new ETF: All you need to know

Zerodha Fund House has launched the Nifty Smallcap 100 ETF, expanding its product portfolio within the exchange-traded fund (ETF) category. This new offering aims to replicate the performance of the Nifty Smallcap 100 Total Returns Index, providing investors access to a diversified portfolio of smaller businesses across various industries. The New Fund Offer (NFO) started on August 25 and will close on September 5. This launch is part of Zerodha's strategy to broaden its index-based product suite, as noted by Vishal Jain, CEO of Zerodha Fund House, who stated, "The launch builds on the company’s efforts to provide a full suite of index-based products."

The introduction of the Nifty Smallcap 100 ETF comes at a time when ETFs are gaining popularity among Indian investors due to their cost-effectiveness, passive management, and ability to offer instant diversification. Industry data highlights a steady rise in inflows into equity ETFs, especially those following index-based strategies.

Commenting on this, Vaibhav Jalan, Chief Business Officer at Zerodha Fund House, emphasised the potential growth journey for investors, saying, "Many of today’s market leaders began as small-caps, and this ETF allows investors to participate in the journey of tomorrow’s potential leaders."

The ETF is available for purchase on major stock exchanges through leading brokers, with a minimum investment requirement of one unit. It can also be accessed via the Coin by Zerodha and myCAMS platforms.

Designed for those with a higher risk appetite and longer investment horizons, small-cap stocks traditionally offer higher long-term growth prospects, albeit with greater volatility compared to large- and mid-cap stocks. This launch allows investors to employ a core-satellite strategy or tailor their asset allocation according to their risk tolerance.