Investing Zerodha Zerodha Fund House Nithin Kamath

Zerodha Mutual Fund

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Zerodha Mutual Fund (operating under the brand Zerodha Fund House) is an Indian asset management company sponsored by Zerodha Broking Limited, the country’s largest discount broker by NSE active client count. The AMC received SEBI approval in 2023 and operationalised in 2023-2024. Zerodha Mutual Fund operates under SEBI registration and the SEBI (Mutual Funds) Regulations 1996 framework.

The AMC’s distinctive feature is its exclusive focus on passive index and ETF schemes, with no active discretionary strategies in the line-up. This pure-passive positioning is unprecedented among Indian AMCs and reflects the founders’ (Nithin Kamath and Nikhil Kamath) public advocacy of passive investing as the most cost-effective long-term investing approach for retail Indians. The AMC’s ultra-low TER targeting (under 25 basis points for major index funds) sets a new pricing floor in the Indian mutual fund industry.

As of mid-2025, Zerodha Mutual Fund’s AUM is in the early-stage range (Rs 2,000-5,000 crore), reflecting the typical multi-year journey of newer AMCs to build AUM. The captive distribution through Zerodha Broking’s 8M+ NSE active clients and the Zerodha Coin direct-plan mutual fund platform provides a built-in distribution advantage.

Zerodha was founded in 2010 by Nithin and Nikhil Kamath as one of India’s first discount brokers, offering flat-fee brokerage and digital-first onboarding. The firm grew rapidly through the 2010s and 2020s into India’s largest discount broker by NSE active client count, with over 8 million active clients as of 2024.

Zerodha’s distinctive features:

  • Largest discount broker by NSE active client count since 2019.
  • Pioneering flat-fee brokerage (Rs 20 maximum per executed equity F&O order).
  • Digital-first onboarding with paperless KYC since the firm’s early years.
  • Educational platform: Varsity, Trading Q&A, Z-Connect community.
  • Subsidiary investments: Smallcase , Streak , Sensibull , and others.

Zerodha’s founder duo Nithin Kamath and Nikhil Kamath are among the most-recognised individual entrepreneurs in the Indian financial services industry. Their public advocacy of low-cost passive investing as an alternative to expensive active management has been a consistent theme through their public commentary and the Zerodha Fund House’s strategic positioning.

2023 AMC operationalisation

Zerodha Broking applied for and received SEBI approval to operate a mutual fund AMC, with operations beginning in 2023-2024 under the Zerodha Fund House brand. The launch positioning emphasised:

  • Pure passive investing focus: only index funds and ETFs, no active discretionary schemes.
  • Ultra-low TER: pricing materially below the established AMC peer group.
  • Direct-plan distribution: leveraging Zerodha Coin and the broader Zerodha broker app.
  • No commission to distributors: consistent with the direct-plan-only positioning.
  • Transparent operations: scheme construction rules and rebalancing disclosed openly.

Product range

Zerodha Mutual Fund’s scheme line-up is exclusively passive:

Index funds:

  • Zerodha Nifty 50 Index Fund.
  • Zerodha Nifty Next 50 Index Fund.
  • Zerodha Nifty 100 Index Fund.
  • Zerodha Nifty LargeMidcap 250 Index Fund.
  • Zerodha Flexi Cap Fund (rules-based, not active).
  • Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund (ELSS ).

ETFs:

  • Zerodha Nifty 50 ETF.
  • Zerodha Gold ETF.
  • Zerodha Silver ETF.

The scheme line-up is expected to expand through 2025-2027 with additional index-based and ETF strategies.

Investment philosophy

The Zerodha Fund House investment approach is exclusively passive:

  • Index replication: schemes track defined indices with low tracking error.
  • No active stock selection: portfolio construction follows index methodology rules.
  • Low portfolio turnover: rebalancing only on index reconstitution.
  • Transparent rules: index methodology and rebalancing disclosed for investor understanding.
  • Ultra-low TER: pricing aligned with the cost minimisation philosophy.

This approach is consistent with academic and global empirical evidence that passive index funds outperform the majority of active managers over long horizons after fees, particularly in efficient large-cap markets.

Distribution

Zerodha Mutual Fund is served by KFin Technologies as RTA. Distribution channels:

  • Zerodha Broking client base: 8M+ NSE active clients accessing mutual funds through Zerodha Coin.
  • Online platforms: Groww , Kuvera , ET Money , the MFU , the KFinKart portal .
  • No regular-plan distribution: consistent with the direct-plan-only positioning.

The Zerodha Broking captive distribution provides a substantial advantage in customer acquisition, with existing Zerodha clients accessing mutual funds through the same digital platform they use for equity and F&O trading.

Place in the Indian mutual fund industry

Zerodha Mutual Fund occupies a distinctive position in the Indian mutual fund industry as the only pure-passive AMC. The strategic positioning has several implications:

For the AMC’s growth

  • Built-in distribution scale through 8M+ Zerodha clients.
  • Brand alignment with retail investors who already use Zerodha for broking.
  • TER pressure on incumbents as Zerodha’s ultra-low pricing creates a competitive reference point.

For the broader industry

  • Industry TER compression: incumbent AMCs face pressure to reduce TER on index and ETF schemes.
  • Passive-investing acceleration: visibility of low-cost passive options accelerates retail passive adoption.
  • Direct-plan platform growth: Zerodha Coin’s continued evolution as a direct-plan distribution platform creates ecosystem effects beyond Zerodha Fund House.

Comparison with peer broker-aligned AMCs

The broker-aligned AMC subset includes:

Among this subset, Zerodha is the most clearly differentiated through its pure-passive positioning. The strategic question is whether the broader Indian mutual fund market evolves toward passive (favouring Zerodha) or remains predominantly active (limiting Zerodha’s addressable market).

See also

External references

References

  1. Zerodha Mutual Fund offer documents and scheme information documents, zerodhafundhouse.com, accessed May 2026.
  2. Zerodha Broking public disclosures and quarterly client statistics.
  3. SEBI Master Circular on Mutual Funds, sebi.gov.in.
  4. AMFI monthly AUM data, amfiindia.com.
  5. Historical coverage of Nithin Kamath’s public commentary on passive investing.

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