'Passive investing works well for retail investors'

Model-driven vs human-led portfolios?

Zerodha Fund House is a passive-only, retail-focused AMC offering products that serve as core building blocks across asset classes. Our suite includes ETFs, index funds and Funds of Funds (FoFs).

Data show alpha is transient and shifts across managers and strategies. The bigger challenge is predicting which fund managers will consistently outperform. At Zerodha, we believe disciplined, passive strategies anchored by diversified, low-cost vehicles are the most effective way for retail investors to participate in the markets, given the elusive nature of sustained alpha.

Your first fund and trust playbook?

Our vision is to democratise investing through simple, transparent products. We launched the Zerodha Nifty Large Midcap 250 Index Fund in November 2023, followed by the Zerodha Nifty 1D Rate Liquid ETF (LIQUIDCASE), now our most popular product. Today, we manage 13 products across equity, debt and commodities with an aggregate AUM of Rs 8,000 crore.

This success highlights the demand for straightforward, cost-effective solutions. We also focus on streamlining the investor experience. A flagship initiative is our in-house WhatsApp platform, a first-of-its-kind tool enabling SIPs or lump sum investments with just a few taps, removing app downloads or multiple logins. Going forward, we aim to develop more intuitive solutions that simplify investing.

On low-friction investing and investor churn.

Though digital access could increase churn, we are seeing a positive trend. Our Zerodha Nifty Large Midcap 250 Index Fund, launched in 2023, has grown to over 1.8 lakh investors. Those who invested in August 2024, 75 per cent stayed invested a year later.

This shows investors are not only starting but staying committed. We will continue building simple and seamless journeys that help investors take the leap and stay

the course.

Rapid-fire questions

• One AMC you admire (not yours): Vanguard.
• One hot trend you’re glad to have skipped for your investors: Flavours of the month.
• Beyond returns, one criterion you want investors to judge your AMC on: Making access to financial products truly simple.
• If not running an AMC, what would you be doing? Helping design better financial outcomes.

This article was originally published on October 27, 2025.