Zerodha Nifty Smallcap 100 ETF

What is the Zerodha Nifty Smallcap 100 ETF?
It's an Exchange Traded Fund (ETF) that tracks/replicates the performance of the Nifty Smallcap 100 Total Return Index.

What is the investment objective of Zerodha Nifty Smallcap 100 ETF?
The fund aims to provide returns that mirror the Nifty Smallcap 100 Total Return Index, subject to tracking error. It's important to note that there is no assurance or guarantee that this objective will be achieved.

What does "passively managed" or "tracking an index" mean?
It means the fund follows the Nifty Smallcap 100 index instead of a Fund manager actively picking stocks.

What is the Nifty Smallcap 100 Total Return Index (TRI)?
The Nifty Smallcap 100 TRI is a benchmark index that tracks the performance of the top 100 small-cap companies listed on the NSE. The "Total Return Index" (TRI) means the index performance includes reinvested dividends from these companies.

Who should invest in this fund?
Investors who may seek long-term capital growth and have a high-risk appetite. The fund is rated as "Very High Risk,".

How can I invest in this ETF during the New Fund Offer (NFO)?
The ETF is available on Coin by Zerodha and CAMS Online platform.

How do I buy or sell units after the NFO?
After the NFO, you can buy or sell units on the exchanges through your demat account, just like a stock. The minimum tradeable lot is one unit. Direct transactions with the AMC are allowed only for Market Makers and Large Investors in the creation unit size of 1,50,000 units or ₹ 25 crores at applicable NAV.

What are the tax implications?
If the investment period is 1 year or less, the gains are treated as short-term capital gains and taxed at 20% (plus 4% cess and applicable surcharge).
If the investment period is more than 1 year, the gains are treated as long-term capital gains. These are tax-free up to ₹1.25 lakh in a financial year. Gains above ₹1.25 lakh are taxed at 12.5% (plus 4% cess and applicable surcharge). Please consult a tax advisor for specific advice.

Why should the market price stay close to the NAV?
Large investors and Market Makers can create or redeem large blocks of units directly with the fund. This arbitrage process helps correct any significant difference between the market price and the NAV, keeping them closely aligned.

Are there any exit loads or lock-in periods?
No. There is no exit load and no lock-in period applicable on the Zerodha Nifty Smallcap 100 ETF.

Can I switch from another Zerodha Mutual Fund into this ETF?
No, switching option from one Zerodha Mutual Fund scheme to this ETF is not allowed 

The risk-o-meter says "Very High Risk." What does this mean?
This rating reflects the high volatility of the small-cap stocks the fund holds. It means your investment value might change sharply, and you could lose a substantial portion of your principal. It is only for investors willing to embrace a high level of risk in their portfolio..