Mutual Funds
Passive investing
Zerodha AMC
Zerodha AMC philosophy: passive-only
Zerodha Fund House has committed to passive-only investing: no actively-managed equity or debt funds.
What “passive-only” means
| Allowed | Not offered |
|---|---|
| Index funds (Nifty 100, LargeMidcap 250) | Actively managed equity (large cap, mid cap, etc.) |
| ETFs (Gold, Silver, 1D Liquid) | Actively managed debt |
| Fund of Funds (multi-asset) | Hybrid / dynamic asset allocation |
| ELSS structured as index fund | Active ELSS |
The reasoning
- Active managers struggle: SPIVA India reports show majority of active funds underperform their benchmark over 10 years.
- Cost matters: Active TER (~2%) drags compounding; passive TER (~0.10%) is materially better.
- Behaviour over genius: Investors benefit more from staying invested cheaply than from picking the right manager.
- Conflict reduction: No closet-active funds, no asset gathering for fees.
What investors get
- Predictable underperformance: -0.10% to -0.20% vs benchmark (after TER, tracking error).
- No upside surprise: No alpha from manager skill.
- No downside surprise: No style drift, no closet-active fees.
When passive may not be enough
- Tactical asset allocation (timing markets).
- Smart-beta exposure (Zerodha may offer factor indices).
- Specific theme exposure.
For complex needs, a combination of passive (Zerodha) + select active funds may suit. Consult a SEBI-registered Investment Adviser.
See also
- Zerodha Fund House overview
- Zerodha Asset Management Company structure
- How Zerodha AMC differs from regular AMCs
- Vishal Jain (Zerodha AMC CEO)
- Zerodha Nifty LargeMidcap 250 Index Fund
- Zerodha Nifty 100 Index Fund
- Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund
- Zerodha Gold ETF
- Zerodha Silver ETF
- Zerodha Nifty 1D Rate Liquid ETF (LIQUIDCASE)
- Zerodha Overnight Fund
- Zerodha Multi Asset Passive FoF
- Invest in Zerodha Fund House via Coin
- Park idle cash in LIQUIDCASE
- LIQUIDCASE as collateral on Zerodha
- Index fund
- ETF
- Total expense ratio
- Tracking error
- Active vs passive investing
- Direct vs regular plan
- SPIVA India
- SEBI RA vs IA distinction
- Mutual funds in India
- Zerodha
- Coin (Zerodha)
- HDFC Mutual Fund
- PPFAS Mutual Fund
External references
References
- Zerodha Fund House, Investment philosophy, zerodhafundhouse.com.
- S&P Dow Jones Indices, SPIVA India scorecards, spglobal.com.