Kotak Mahindra Mutual Fund announced the launch of the Kotak Quant Fund, an open-ended equity thematic fund scheme following the quant-based investing scheme.
The scheme opened for public subscription on July 12, 2023, and will close on July 26, 2023. The scheme re-opens for continuous sale and repurchase on August 09, 2023.
Q. What kind of mutual fund scheme is this?
This is an open-ended equity scheme following a quant based investing theme.
Harsha Upadhyaya, CIO - Equity, Kotak Mahindra Mutual Fund said, “Kotak Quant Fund seeks to generate long-term capital appreciation with data-driven investing, where the wisdom of market data meets the quant model. By blending fundamental insights with behavioural factors, this open-ended equity scheme endeavours to deliver an optimised portfolio that paves the way for long-term capital appreciation. Embrace the future of investing and seize the potential for growth through our quant-based approach.”
Q. What is the main objective of investing in this fund?
The scheme shall seek to generate long-term capital appreciation by investing predominantly in equity and equity-related securities selected based on the quant model theme. However, there is no assurance that the objective of the scheme will be achieved.
Q. How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1 for purchase and Re 0.01 for switches. They can also invest through a Systematic Investment Plan (SIP) of ₹500 (subject to a minimum of 10 SIP instalments of ₹500 each) during the New Fund Offer (NFO) period. There is no upper limit for investment.
Under normal circumstances, the asset allocation of the scheme will be as follows:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equity and equity-related instruments based on the quant model theme | 80% | 100% | Very High |
Equity and equity-related securities of companies other than the quant model theme | 0% | 20% | Very High |
Overseas mutual funds schemes/ETFs/foreign securities | 0% | 20% | Very High |
Debt and money market securities | 0% | 20% | Low to Moderate |
Units issued by REITs and InvITs | 0% | 10% | Very High |
Q. Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such focused equity funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
Mutual Fund House | Name of the Fund |
DSP Mutual Fund | DSP Quant Fund |
ICICI Prudential Mutual Fund | ICICI Prudential Quant Fund |
TATA Mutual Fund | Tata Quant Fund |
SBI Mutual Fund | SBI Equity Minimum Variance Fund |
Axis Mutual Fund | Axis Quant Fund |
Nippon India Mutual Fund | Nippon Quant Fund |
Quant Mutual Fund | Quant Quantamental Fund |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against NIFTY 200 TRI. The composition of the aforesaid benchmark is such that it is most suited for comparing the performance of the scheme. The trustees reserve the right to change the benchmark in the future for measuring the performance of the scheme and as per the guidelines and directives issued by SEBI from time to time.
Q. Are there any entry or exit loads to this scheme?
This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:
- For redemption/switch out within 90 days from the date of allotment: 0.5%
- If units are redeemed or switched out on or after 90 days from the date of allotment - Nil.
Q. Who will manage this scheme?
Harish Krishnan will be the fund manager for equity investment of the scheme, Abhishek Bisen will be the fund manager for debt investment of the scheme and Arjun Khanna will be the dedicated fund manager for investments in foreign securities.
Q. Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.
