How Navi’s FoF on Vanguard US Total Stock Market ETF could add value to your portfolio – Moneycontrol.comBy Kalpana Warrier on September 13, 2021 Vanguard Total Stock Market Index Fund ETF is one of the largest passively managed US-based ETFs and also among the cheapest funds Last month, Navi mutual fund filed a draft offer document with SEBI for a new mutual fund scheme. Called the ‘Vanguard Total Stock Market ETF FoF,’ this fund of fund will invest in Vanguard Total Stock Market Index Fund ETF (VTI). VTI is one of the largest passively managed US-based ETFs and also among the cheapest funds. Vanguard, founded by John C. Bogle, was the pioneer of low-cost index funds. This ETF’s expense ratio is just 0.03 percent. Navi’s FOF would, therefore, be among the cheapest (with charges of up to 0.09 percent). VTI, the underlying fund, is the third largest ETF in the world. VTI tracks the CRSP US Total Market Index which represents nearly the entire investable equity US market. Though VTI invests in US equities of all sizes, including mid, small, and micro capitalization companies, it has heavy allocations to the most popular names such as Apple, Microsoft and Alphabet. Its top 10 holdings account for 23.6 percent of the total assets. CRSP US Total Market Index, the benchmark for the Vanguard ETF, is a diversified, comprehensive and broader index having exposure to different sectors. On the contrary, most of the US-focused funds offered by domestic mutual funds in India are investing majorly in technology stocks. According to a recent report published in the seekingalpha.com, VTI has outperformed its closest peer ETFs that track the S&P 500 index over long run. Unlike most other broad-based US indices, the underlying benchmark index for this fund invests in companies across market capitalisation, including small-cap stocks. That is one reason behind its strong performance. But that also makes it slightly more volatile than other broad-based indices. US Equity markets have been one of the most developed in the world. This fund will help Indian investors participate in stocks and sectors that are otherwise not available in India. A low correlation between the equity market of US and India certainly makes the case for Indian investors taking the US route. International funds, including US-focused ones, are taxed as debt funds. Long-term capital gains tax is applicable at 20 percent with indexation on the profit, if you sell units after 36 months. Capital gains are added to your income and taxed if the holding period is less than 36 months. Dhuraivel Gunasekaran Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Tumblr (Opens in new window)Click to share on WhatsApp (Opens in new window) Published in News and Technology Kalpana WarrierMore from NewsMore posts in News »€500 million in private sector investments headed for Ukraine€500 million in private sector investments headed for UkraineRBI asks banks to share information on exposure to Adani Group companies – Business StandardRBI asks banks to share information on exposure to Adani Group companies – Business StandardNSE puts some Adani firms under watch: What is additional surveillance mechanism (ASM)? – The Indian ExpressNSE puts some Adani firms under watch: What is additional surveillance mechanism (ASM)? – The Indian ExpressHindenburg bet against India’s Adani puzzles rival U.S. short sellers – Reuters IndiaHindenburg bet against India’s Adani puzzles rival U.S. short sellers – Reuters IndiaGautam Adani fails to calm investors as market wipeout hits $100 billion – CNNGautam Adani fails to calm investors as market wipeout hits $100 billion – CNNMore from TechnologyMore posts in Technology »Closing Bell: Nifty ends flat, Sensex rises 224 pts; FMCG gains, power stocks drag – MoneycontrolClosing Bell: Nifty ends flat, Sensex rises 224 pts; FMCG gains, power stocks drag – MoneycontrolMarket LIVE Updates: Indices trade higher with Nifty around 17,600; ITC top gainer – MoneycontrolMarket LIVE Updates: Indices trade higher with Nifty around 17,600; ITC top gainer – MoneycontrolBuzzing Stocks: Britannia, Coal India, Eicher Motors, others in news today – MoneycontrolBuzzing Stocks: Britannia, Coal India, Eicher Motors, others in news today – MoneycontrolWall St rallies as Fed’s Powell nods to easing inflation after rate hike By Reuters – Investing.comWall St rallies as Fed’s Powell nods to easing inflation after rate hike By Reuters – Investing.comTech Mahindra Q3 result: Net profit slips 5% to Rs 1,297 crore; new deal wins at $795 million – MoneycontrolTech Mahindra Q3 result: Net profit slips 5% to Rs 1,297 crore; new deal wins at $795 million – Moneycontrol