NEW DELHI: Stock brokerage Zerodha and Wealth management company Smallcase are joining hands to launch an asset management company (AMC). The AMC, as per Zerodha’s founder and CEO Nithin Kamath, will focus on building low-cost passive mutual fund products.
Zerodha in September 2021 had received in-principle approval from market regulator - Securities and Exchange Board of India (SEBI) - to set up an AMC.
While Zerodha’s approval for final registration is under consideration, the joint venture between the two firms has already been approved by SEBI.
“While awaiting final approval of our AMC (mutual fund), we asked if we should build it ourselves or collaborate. Given 6+ years of experience that Smallcase has in building investment products, it made perfect sense to create a JV to build the AMC,” Kamath said on Twitter on Wednesday.
Vasanth Kamath, founder of Smallcase, said that the opportunity to increase capital market participation for retail investors is massive, and that they believe that mutual funds will continue to accelerate this trend with the right mix of products, solutions & technology.
Founded in 2016, Smallcase allows retail investors to invest in portfolios of broker-partner stocks and exchange-traded funds (ETFs).
India’s mutual fund industry is pegged at about Rs 40 lakh crore and has over 40 firms offering their products, according to the latest AMFI data.