NFO Analysis: Navi US Total Stock Market Fund of Fund

Navi Mutual Fund is launching the US Total Stock Market Fund of Fund. This scheme is currently the first scheme that provides an opportunity to invest in Vanguard.

Navi Mutual Fund offers various types of schemes such as equity-oriented, debt-oriented, hybrid, index funds and FoFs. The quarterly average AUM of Navi Mutual Fund is Rs 929.30 crore as of December 2021 and offers 13 funds, which is launching the US Total Stock Market Fund of Fund. This is scheme is currently the first scheme that provides an opportunity to invest in Vanguard. This is an open-ended fund that seeks to invest in the units of Vanguard Total Stock Market ETF (VTI) or the Schwab Total Stock Market Index Fund (SWTSX).

Subscription Dates: The NFO was launched on February 04, 2022, and will close on February 18, 2022. 

Objectives of the scheme: The scheme offers long-term capital appreciation by investing in units of the Vanguard Total Stock Market ETF (VTI) or the Schwab Total Stock Market Index Fund (SWTSX).

Investment Strategy: The scheme follows a passive investment strategy and will chiefly invest in units of the Vanguard Total Stock Market ETF (VTI) or in the Schwab Total Stock Market Index Fund (SWTSX). The AMC/Underlying Scheme does not make any judgments about the investment merit of Vanguard Total Stock Market ETF or in the Schwab Total Stock Market Index Fund (SWTSX) nor will it attempt to apply any economic, financial or market analysis. The Scheme shall invest in Vanguard Total Stock Market ETF or in the Schwab Total Stock Market Index Fund (SWTSX), except to meet its liquidity requirements. The scheme would also invest in units of Liquid/ debt schemes, debt and money market instruments.

Asset Allocation:

Benchmark: CRSP US Total Market Index

Fund Manager: Pranav Vasa

This fund will be suitable for investors with high-risk profiles as the fund manager will allocate the capital towards foreign equity and equity-related instruments which also brings the risk of currency fluctuations and a very small proportion towards debt and money market instruments. Investors who are willing to diversify their portfolios and wants exposure to the US stock market can consider investing in this fund. Presently this fund is the only fund in India that provides an opportunity to invest in Vanguard, the pioneer of low-cost passive fund management. VTI is the 3rd largest ETF in the world. The scheme will offer diversification. By investing in this scheme you will get access to 4,000+ stocks covering almost 100% of the US Stock Market, with a CAGR (in INR terms) of 28.15 per cent, 20.11 per cent and 20.27 per cent over 1, 5 and 10 years respectively. As this is a new theme that the fund is offering, before you invest in this fund it’s better to wait for at least a year to look at the performance. Investors who are willing to invest should have a high-risk appetite.