#Zerodha #ETFs #NiftySmallcap100 #SmallCapInvesting #PassiveInvesting #IndexFunds #WealthCreation #IndianStockMarket #FinancialPlanning #SmartInvesting #NFO
Mumbai: Zerodha Fund House has announced the launch of its Zerodha Nifty Smallcap 100 ETF, further strengthening its lineup of index-based investment products. The open-ended exchange-traded fund (ETF) aims to replicate the performance of the Nifty Smallcap 100 Total Returns Index, giving investors exposure to some of India’s most promising small-cap companies.
The New Fund Offer (NFO) opened for subscription on August 25, 2025, and will close on September 5, 2025. Once listed, the ETF will be tradable on stock exchanges through leading brokers, providing investors with a convenient and cost-efficient way to participate in the small-cap segment.
Access to Small-Cap Growth Opportunities
Small-cap companies are often considered the growth engines of the economy, with many eventually evolving into mid-cap or even large-cap market leaders. By tracking the Nifty Smallcap 100 Total Returns Index, the Zerodha ETF gives investors access to a diversified portfolio across sectors such as consumer goods, industrials, technology, and healthcare.
Industry experts emphasize that while small-cap investments carry higher volatility compared to large- and mid-cap stocks, they also offer the potential for superior long-term returns. This makes the fund more suitable for investors with higher risk appetite and longer investment horizons.
Vaibhav Jalan, Chief Business Officer at Zerodha Fund House, highlighted this perspective, saying:
“Many of today’s market leaders began their journey as small-cap companies. This ETF allows investors to participate in the growth story of tomorrow’s potential leaders while benefiting from the discipline and transparency of a passive investing strategy.”
Expanding the ETF Lineup
With this launch, Zerodha Fund House now offers ETFs across the large-cap, mid-cap, and small-cap categories, enabling investors to build a core-satellite investment strategy.
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Core holdings: Investors can allocate funds to stable large-cap index ETFs for steady returns.
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Satellite holdings: Mid-cap and small-cap ETFs can be used for higher growth opportunities, allowing for customized asset allocation based on individual risk tolerance.
Vishal Jain, CEO of Zerodha Fund House, stated that the new product reflects the company’s broader strategy of democratizing access to index-based investing in India.
“Our objective is to provide a full suite of low-cost, transparent, and passive investment solutions. The launch of the Nifty Smallcap 100 ETF is a step toward offering investors exposure across all market segments,” Jain noted.
Key Features of the ETF
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Benchmark: Nifty Smallcap 100 Total Returns Index
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Fund Type: Open-ended ETF
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NFO Period: August 25 – September 5, 2025
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Minimum Investment: One unit (making it highly accessible for retail investors)
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Listing: To be available for trading on NSE and BSE through major brokers
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Platforms: Subscriptions available on Coin by Zerodha and myCAMS
By keeping the entry requirement low and ensuring wide availability, Zerodha aims to make small-cap investing more accessible to both retail and institutional investors.
Growing Investor Appetite for ETFs
The launch comes at a time when ETFs are steadily gaining popularity in India. According to industry data, inflows into equity ETFs have been consistently rising, driven by growing investor preference for low-cost passive investment strategies over actively managed funds, which often struggle to outperform benchmarks.
Over the past few years, the Indian mutual fund industry has seen strong growth in passive products, with ETFs and index funds recording significant inflows. This reflects a global trend where investors are increasingly gravitating toward passive investing for its simplicity, transparency, and lower costs.
Small-Cap Investing in Current Market Context
The timing of Zerodha’s launch is notable, as small-cap indices have outperformed large-cap indices in recent market cycles. While this has generated enthusiasm, experts caution that valuations in the small-cap space can be volatile, and investors should adopt a long-term view when considering allocations.
Financial advisors recommend that small-cap ETFs like this one should be used as a part of a diversified portfolio, not as the sole investment avenue. Allocations of 5–15% of total equity exposure are generally suggested for investors comfortable with higher risk.
Democratizing Investment Access
Zerodha, known for its discount brokerage platform and digital-first approach, has been steadily expanding its fund house offerings since entering the asset management industry. By focusing on simple, index-based, low-cost products, it aims to attract younger investors and first-time market participants.
The introduction of the Nifty Smallcap 100 ETF aligns with this mission, bridging the gap for investors who want exposure to the high-growth potential of smaller companies without the challenges of stock-picking.
Conclusion
The launch of the Zerodha Nifty Smallcap 100 ETF marks another milestone in the evolution of India’s passive investing landscape. By offering a transparent, low-cost product that captures the performance of the small-cap segment, Zerodha Fund House is providing investors with an important building block for long-term wealth creation.
For investors willing to embrace the volatility of small-cap equities, this ETF could serve as a gateway to participating in India’s next generation of market leaders.
#Zerodha #ETFs #NiftySmallcap100 #SmallCapInvesting #PassiveInvesting #IndexFunds #WealthCreation #IndianStockMarket #FinancialPlanning #SmartInvesting #NFO #CoinByZerodha #MutualFunds #EquityMarkets
