Sachin Bansal-backed Navi Mutual Fund files for Total Market Index Fund

Representative image

The Flipkart co-founder Sachin Bansal-backed Navi Mutual Fund (MF) has filed for Navi Total Market Index.

The fund will track the performance of Nifty Total Market Index, to give investors exposure across large-cap, mid-cap, small-cap and even micro-cap stocks.

Micro-cap stocks are those stocks that have market cap of under Rs 5,000 crore.

As per the scheme's filing, the Nifty Total Market Index includes the Nifty 500 stocks and Nifty Microcap 250 stocks. In all, the Total Market Index will give investors exposure to 750 stocks.

However, several of the stocks in the index have less than one percent weight, especially those at the lower-end of market cap spectrum, the micro-cap stocks.

"The fund will give diversification across market-caps, but then as larger-sized stocks would account for bulk of the index, the smaller-sized stocks' weight in the index would be negligible. So, any gains from the micro-caps may not necessarily translate into meaningful gains on the index," says Amol Joshi, founder of Plan Rupee Investment Services.

In terms of sectors, the Nifty Total Market Index has 30 percent exposure to financial services, 13 percent to IT, 11 percent to consumer goods, 9 percent to oil & gas, four percent to pharma and auto each, and then to other sectors.

Also read: Sachin Bansal on why his Navi Mutual Fund is focused on rolling out passive schemes

Joshi adds that investors can look at funds linked to Nifty 500 index for now, as it is a widely tracked and better-understood index.

The fund will get launched after approval from SEBI.