January 10, 2024
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Zerodha MF launches India’s first Growth Liquid ETF
Replicating the Nifty 1D Rate Index, which measures the returns generated by market participants lending in the overnight market, Zerodha Fund House announced the launch of its new scheme and India’s first Growth Liquid ETF – Zerodha Nifty 1D Rate Liquid ETF.
The fund is expected to get listed on NSE and BSE exchanges by the 24th January 2024.
The ETF primarily invests in TREPS (Treasury Bills Repurchase) traded on the CCIL (Clearing Corporation of India Ltd) platform.
Advantages:
1.low credit risk and low-interest rate risk: As the investment is made in short-term debt products backed by treasury bills, it carries a relatively low credit risk and low-interest rate risk. The fund may facilitate a seamless transition between equity and cash within the same settlement, thereby facilitating better cash management and hence suitable for all types of investors.
2. Easier to track the ETF’s performance: “This new product from Zerodha Fund House marks the arrival of liquid ETFs that offer a Growth NAV for the first time in India. This feature makes it easier to track the ETF’s performance.
3. Taxability: Additionally, the returns are taxed only when the ETF is sold, as compared to daily dividends which are taxed continuously.
4. Lower ticket size: To further enable more retail investors, the ETF will have a lower ticket size, starting with a NAV of 100,” Vishal Jain, CEO, of Zerodha Fund House said.
The Nifty 1D Rate Index has been developed to measure the returns generated by market participants lending in the overnight market. The index uses the overnight rate provided through the Tri-Party Repo Dealing System (TREPS) for the computation of index values.
The minimum application amount for the Zerodha Nifty 1D Rate Liquid ETF is Rs 500.
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