Zerodha Fund House’s first mutual fund, the Nifty LargeMidcap 250 Index Fund, has completed its first year, delivering returns of 35.13%. An investment of ₹1 lakh at launch would have grown to ₹1.35 lakh during this period.

The fund tracks the Nifty LargeMidcap 250 Index, which provides diversified exposure across 100 large-cap companies and 150 mid-cap companies, the fund house said.

As of November 2024, the fund has an asset under management (AUM) of ₹677.23 crore. It holds key companies like HDFC Bank, ICICI Bank, Reliance Industries, Infosys, and ITC.

By equally allocating funds between large-cap and mid-cap companies, the strategy aims to balance risk and return over the long term, with mid-caps offering higher growth potential but also more volatility.

Despite the positive performance, investors should be cautious.

The fund carries a very high-risk rating, making it suitable mainly for those with a long-term investment horizon and a higher risk tolerance.

Market fluctuations, especially in mid-cap stocks, could result in significant volatility.

Additionally, while the fund’s minimal expense ratio of 0.26% and no exit load make it cost-effective, past performance is not indicative of future returns, and the risk of loss remains.

With a tracking error of 0.04%, the fund closely mirrors its benchmark index.

The fund is accessible with a low minimum investment of ₹100, making it suitable for small investors.

However, potential investors should consider their risk profile and investment goals before committing to this high-risk option.