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| Name of the scheme | 1-year back | Invest now | Fund category | expense ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest now | Equity: Big Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest now | Equity: Big Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest now | Equity: Big Cap | 0.25% |
| Axis Nifty 500 Index Fund | , | Invest now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest now | Equity: Mid Cap | 0.28% |
So, what makes ETFs attractive compared to mutual funds in the US?
Zeroda’s CEO Nithin Kamath believes that taxation plays an important role.
In a post on X (East Twitter), Kamath explained why ETFs in the US have an edge over mutual funds. He said that American mutual funds act as pass-through vehicles, meaning they distribute capital gains to unit holders who should then pay taxes on the benefits.
This structure reduces mutual funds to reduce.
On the other hand, ETFs use an ‘in-in-into’ construction and redemption system. This process helps ETF issuers to manage more efficient benefits, preventing the distribution of taxable capital gains to investors.
As a result, ETFs enjoy an important tax profit, which Kamath considers a weak reason for their popularity.
Indian scenario: ETFS vs Mutual Fund
Kamath said that in India, both mutual funds and ETFs do not do the unit holders directly. It differs from Portfolio Management Services (PMS) and Category 3 Alternative Investment Fund (AIF), which pass through taxes.
Despite this, ETF is observing an increase in the interests of investors in India, especially in index-based investment.
Data shows changes in investor preferences.
Investors appear to move towards cost-skilled, passive investment options.
first published: February 23, 2025 1:03 pm First
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