Zerodha’s Multi Asset Passive FoF NFO opens on July 25, 2025 - All You Need to Know

Zerodha Multi Asset Passive FoF is an open-ended fund of fund scheme designed to offer investors diversified exposure across equity, debt, and commodity asset classes using a fully passive strategy. The core idea is to minimise portfolio risk by combining asset classes with low correlation, thus improving risk-adjusted returns over the long term. It invests primarily in index funds and ETFs, which helps reduce fund-level management bias and lowers costs. By doing so, it allows investors to benefit from broad market participation across multiple sectors and asset types, while keeping volatility in check. It is suited for long-term wealth creators seeking stable and diversified investment avenues.

Key Features of Zerodha Multi Asset Passive FoF

• Opening Date: July 25, 2025
• Closing Date: August 08, 2025
• Exit Load: Nil
• Minimum Investment Amount: ₹100 and in multiples of ₹100 thereafter

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Objective of Zerodha Multi-Asset Passive FoF

The primary objective of Zerodha Multi Asset Passive FoF - Direct (G) is to offer diversified exposure across equity, debt, and commodities through a passive investment approach. The scheme aims to enhance risk-adjusted returns while reducing portfolio volatility by blending asset classes that have low correlation.

Investment Strategy of Zerodha Multi Asset Passive FoF

• Follows a passive multi-asset strategy investing only in Index Funds and ETFs.
• Asset allocation includes domestic equity, debt instruments, and commodity ETFs like gold and silver.
• Uses low correlation across asset classes to reduce risk and improve consistency of returns.
• No active fund management bias, ensuring low-cost and transparent investing.
• Portfolio rebalancing will occur based on asset weight changes or index composition.

Risks Associated with Zerodha Multi Asset Passive FoF

• Underlying Scheme Risk: Performance depends entirely on the underlying Index Funds/ETFs.
• Operational Risk: Issues in trading volumes, settlement delays, or ETF liquidity may impact performance.
• Commodity Price Risk: Exposure to gold/silver ETFs carries price volatility risk.
• Double Expenses: Investors indirectly bear the costs of both the fund of funds and underlying funds.
• Market Risks: External factors like interest rates, government policies, and inflation may affect all asset classes.

Risk Mitigation Strategy by Zerodha Multi Asset Passive FoF

Zerodha Multi Asset Passive FoF adopts a structured risk mitigation framework by spreading investments across equity, debt, and commodities to diversify exposure and lower overall portfolio volatility. The underlying schemes are all SEBI-registered index funds or ETFs, which reduces manager bias. The AMC has a dedicated Risk Management Division that regularly monitors internal thresholds and portfolio parameters to ensure compliance with SEBI’s risk norms. Furthermore, investing in ETFs ensures liquidity through exchange trading and facilitates transparency in asset pricing. While systemic risks cannot be entirely avoided, the scheme is designed to limit concentration and asset-class-specific risk.

What Type of Investor Should Invest in Zerodha Multi Asset Passive FoF?

• Investors looking for long-term diversified wealth creation
• Individuals seeking low-cost passive solutions with multi-asset exposure
• Conservative investors aiming to reduce volatility without sacrificing returns
• First-time investors prefer simplified yet balanced portfolios
• Those wanting to avoid active fund management risks

Where Will the Zerodha Multi Asset Passive FoF Invest?

• SEBI-registered Index Funds and ETFs tracking equity, debt, and commodities
• Debt securities and money market instruments like T-bills, bonds, and repo
• Commodity ETFs, primarily gold and silver-backed
• Instruments such as non-convertible debentures, zero-coupon bonds, and floating rate notes
• Tri-party repo, secured premium notes, and other approved fixed income instruments