Sachin Bansal’s Navi MF plans to bring Vanguard Funds to India

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Flipkart co-founder Sachin Bansal’s Navi Mutual Fund (MF) has filed papers with the markets regulator seeking approval for a ‘Total US Stock Market’ fund-of-funds (FoF).

The proposed scheme will feed into Vanguard Total Stock Market Index Fund ETF. Vanguard, founded by John Bogle, is a pioneer in passive investing in the US and the second-largest money manager after Blackrock. Vanguard Total Stock Market Index Fund has an expense ratio of just 0.03% and has delivered annual average returns of 44.33%, 18.75% and 14.7% CAGR over the past 1, 3 and 10 years in dollar terms.

Under the Securities and Exchange Board of India (Sebi) rules, the expense ratio of the Indian fund house cannot be more than twice the underlying fund. This would cap the expense ratio of the Navi Total US Stock Market FoF to just 0.09%.

Bansal’s Navi Mutual Fund also focuses on passive investing. Alongside its Total US Stock Market filing, the fund house also filed for a NASDAQ 100 FoF. However, this scheme will invest in other asset managers in the US. An indicative list of such asset managers in its filings includes Blackrock-owned iShares funds, Lyxor and USAA Funds.

Apart from its filing for foreign funds, Navi has also filed for four domestic index funds covering banking, information technology, pharma and commodities. In addition, it has filed for an index fund tracking environment, social and governance (ESG). All the proposed index funds will track the Nifty indices. These filings add to previous applications with Sebi for index funds tracking the Nifty Midcap 150 and the Nifty Smallcap 250. Navi already has an index fund tracking the benchmark Nifty 50, which was launched in July 2021. This fund is operational with assets under management (AUMs) of around 120 crore.

Bansal’s Navi Group, which is also into lending and insurance, acquired Essel Mutual Fund from Subhash Chandra’s Essel Group in February 2021. The company has total AUM of around 900 crore.

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