Zerodha Nifty LargeMidcap 250 Index Fund turns one year old; Before investing, check the annual return

Fund house Zerodha announced on Friday that it has achieved a one-year milestone since the launch of its first fund, Zerodha Nifty LargeMidcap 250 Index Fund. This fund, which mirrors the performance of the Nifty LargeMidcap 250 Index, has posted an impressive return of 35.13%. For investors who invested Rs 1 lakh when the fund was launched, their investment would have grown to Rs 1.35 lakh during this period.

Offering diversified exposure to 100 large-cap companies and 150 mid-cap companies, the fund currently boasts assets under management (AUM) of Rs 677.23 crore as on November 2024. Some of the fund’s key holdings include prominent companies such as HDFC. Bank, ICICI Bank, Reliance Industries, Infosys and ITC.

The fund’s strategy aims to achieve a balance between risk and return over the long term by equally distributing funds between large and mid-cap companies. While mid-cap companies have higher growth potential, they also have higher volatility. Investors should exercise caution despite the favorable results.

The Zerodha Nifty LargeMidcap 250 Index Fund comes under the high-risk category, making it most suitable for investors with a long-term horizon and higher risk tolerance.

Market fluctuations, particularly in mid-capitalization stocks, can cause significant volatility in the fund’s performance.

Despite its cost-effective features, such as a low expense ratio of 0.26% and no exit charges, it is important to note that past performance does not guarantee future returns and the risk of loss remains.

With a tracking error of 0.04%, the fund closely matches its benchmark index.

Investors can start with a minimum investment of Rs 100, making it affordable for small investors.

The fund house explains that if an investor invests Rs 1,000 in this index fund, Rs 500 will be primarily allocated to the top 100 large-cap companies and the remaining Rs 500 will be primarily allocated to the next 150 mid-cap companies. Investing in this fund offers a simple and streamlined way to passively invest in the Indian stock market while diversifying across different companies, sectors and market capitalization.

“Mid-cap companies can offer higher return potential than large-cap companies, but can also be more volatile than large-cap companies. Therefore, by spreading your money evenly between mid- and large-cap companies, the fund aims to offer a good balance between risk. and profit to create long-term wealth. The fund may be suitable for those looking for investments with a long-term horizon. You can start investing with an investment amount of as little as Rs 100,” the fund said.