@VishalJain Finally there is approval to launch Hybrid Index funds . I wish your fund house will look into this option - Will the introduction of hybrid index funds be helpful to investors?
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Passive aggressive hybrid fund will be a hilarious name for a mutual fund category 
.
Jokes apart, I think this is great move from SEBI to promote passive funds in India. I am eager to see what funds Zerodha launches in these categories.
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Hey Anil, this is just a consultation paper that the regulator has released. The final regulations in what shape and form they will finally come is a while away.
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Yes, whenever these finally convert in regulations, it would be a fillip for passive funds in India.
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Hi @VishalJain,
Do you have any plans to launch Liquid fund in non ETF format? It will be helpful for folks who invest via platforms like CAMS (that deal in SOA format) to keep cash in Liquid fund and do an STP or manual switch out to other Zerodha funds. 50% allocation to midcap is what is discouraging me from your 250 index. However, I like your Equity & Gold. Assuming you get approval to launch it I would still do a switch out slowly than a large SIP given over valuations in current market conditions.
Also is there some plan to tweak asset allocation based on PE. For ex. Mid 150 PE is quite high and may be a good idea to reduce further. Hybrid oriented funds will be more attractive if they are more defensive. Of course in Equity and Gold we are dealing with more volatility in both asset calls so some thing like a cash call based on PE would be a nice addition. I am not an expert and I understand PE canāt be the only criteria but may need others like PB etc but just saying.
This could be a frivolus query but I thought i will anyway ask.
Is it possible to have ETF where the underlying is āUSD Currencyā.
The reason I ask is, we have the standard ETF where the underlying is āequitiesā, we have Gold ETF, Silver ETF. We have ETF to invest in Nasdaq and asian stocks as well (I guess - not sure). So why not have an ETF for USD.
If I wish my children to study abroad, and I am a resident, the only option to hedge against currency depreciation INR to USD is to invest in Gold. Retail residents cannot buy USD from the bank and place it in USD Deposits - this is only for NRIs.
I thought Giftcity - they allow to open USD account, but I was told it is not possible for residents. How do a resident indian who have kids (who wish to send them abroad in future), hedge against currency depreciation. I do understand that the standard answer is invest in stock market which will give higher returns and that should do the trick.
Gold and silver are commodities and they do not generate any income by itself similary currency do not generate a return by itself. Not sure how the mechanism work, if there is a currency ETF, the underlying currency could remain within the country and may not contravene the RBI restriction of outward remittance limit.
The only option for resident indians is to invest in Nasdaq or s&P500 Fof which again RBI has put restrictions (for funds only) Gold ETF or finally invest in TCS as most of their revenue is in USD (as the revenue will reflect currency depreciation)
Stretching this further, there are many NRIās living in Gulf Countries, if you start a ETF for companies in the Gulf - Like Banks, Telecommunication, petroleum companies, etc , many NRI may relate and subscribe. Just a thought.
USD in 2018 was around 68. Today it is around 84 (approx rates).
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@neha1101 have you explored investing in US govt. bonds in the US?
AFAIK, that is permitted already, and provides the necessary exposure to USD without directly exposing oneself to the risks of the equity market.
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Iām looking at Charles Schwab account for direct equity and etf in the USA. Iām still sceptical about the kyc and regulation changes. I think that you could as well explore it.
Can I purchase it from India - could you please give me more details in case you have it or even a link will do.
Similar to how Indian GSECs and TBills are traded on the secondary markets (NSE/BSE),
various US Govt. bonds (dollar-denominated) are available on US-based exchanges.
Also, there are US Govt. bond-based index ETFs too.
Once can buy them using
any brokerage that allows one to invest/trade such securities on US-based exchanges.
Hereās an article that discusses investing in both these financial instruments.
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Hey Neha, your concerns and suggestions are valid. However, at this point the regulations do not permit us to launch Currency ETFs. For NRI investments, GIFT City is evolving and in the next 1-2 years you should be able to to see many products listed there which could be used by NRIs. Hope this helps.
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Hey, thanks for reaching out. We are still finalising our plans on the Liquid & Debt side and will get back soon on that. Our focus as of now is more on providing simple broad-based exposures. Maybe at a later point we would look at smart-beta and other strategic indices.
Whatās your view on the overall industry-level limit by RBI of $7 billion for mutual funds to invest in overseas securities and funds?
This might help.
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Hey Kyoto, we are all eagerly waiting for the limit to be enhanced, so fingers crossed!
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Hi @VishalJain ,
Do you have any plans to enable direct purchase from your fund house website like other AMCs offer. I know we could get SOA via CAMS and you have only two in non ETF format but just checking.
ETFs you can purchase only from your trading account.
Mutual funds almost everyone has an app already or you can just use Coin, MFCentral
Hi ,
I just noticed that there is a huge tracking error in the gold caseās current market price compared to its actual INAV as of today.
At the time of writing this, The gold case is trading at ā¹11.40 to 11.50 (NSE and BSE), but the actual INAV is ā¹10.90 as of 25th JUL 2024
There is a difference of 4% to 5% between the CMP and the current INAV of gold case, shouldnāt this be looked into and corrected by market makers.
I mean how can there be such a big difference between the INAV and the CMP, the impact cost is one aspect which is understandable as it based on demand and supply, but such a big tracking error results in inflated prices, which highly detrimental if left unchecked.
Didnāt expect this
Would love to hear your views on this and how any such deviations are normally corrected
I dont think you can call this tracking error.
Tracking error would be difference of inav to actual asset.
The difference to cmp of etf is a premium.
See other others etfs like hngsngbees 10% premium, mafang is crazy 35%
demand/supply thats all
thatās why stick to MFs and avoid ETF NAV, iNAV drama.