Kotak Mahindra Mutual Fund announced the launch of the Kotak FMP Series 307, a close-ended income fund that endeavours to provide regular income and capital growth with limited interest rate risk to the investors through investments in a portfolio comprising of debt instruments maturing on or before the maturity of the Scheme. The scheme opened for public subscription on February 24, 2023, and will close on February 28, 2023.
Q. What kind of mutual fund scheme is this?
This is a kind ofdebt fundinstrument that aims to generate returns that are commensurate with the performance of the NIFTY Liquid Index. However, there is no assurance that the scheme’s investment objective will be realized.
Q. What is the main objective of investing in this fund?
The scheme endeavours to provide regular income and capital growth with limited interest rate risk to the investors through investments in a portfolio comprising debt instruments maturing on or before the maturity of the scheme.
The asset allocation under the Scheme, under normal circumstances, will be as follows
| Instruments | Allocation | Risk Profile |
| Debt and Money Market Instruments including Government Securities | 0-100% | Low to Medium |
Q. How may one invest in this fund?
The minimum investment in this scheme is ₹5000. There will be two plans under the scheme namely, Regular Plan and Direct Plan. Each plan under the scheme will have two options namely Growth and payout of Income Distribution cum capital withdrawal (IDCW).
Q. Are there similar mutual funds in the market?
Many asset management companies have launched such funds in the past. Some of them include:
| Name of the fund | Three-month returns (in %) |
| UTI Ultra Short-Term Fund | 3.04 |
| WhiteOak Capital Ultra Short-Term Fund | 2.68 |
| Baroda BNP Paribas Ultra Short Duration Fund | 1.71 |
| ICICI Prudential Ultra Short-Term Fund | 1.71 |
| DSP Ultra Short Fund | 1.70 |
| Tata Ultra Short-Term Fund | 1.67 |
| HSBC Ultra Short Duration Fund | 1.66 |
| Bank of India Ultra Short Duration Fund | 1.65 |
| Canara Robeco Ultra Short-Term Fund | 1.59 |
| Source: MoneyControl | |
Q. How will the scheme benchmark its performance?
The performance of the Scheme shall be benchmarked against NIFTY Liquid Index. The scheme will invest in the constituents of the underlying index.
Q. How do investors seek redemption from the scheme?
The tenure of the scheme will be 90 days after the date of allotment of units. The scheme will be fully redeemed/wound up at the end of the tenure of the scheme. In case the maturity date happens to be a non-business day then the applicable NAV for redemptions and switch-out shall be calculated immediately on the next business day.
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” is also “Zero”.
Q. Who will manage this scheme?
Deepak Agrawal is the fund manager for the scheme.
Q. Does the fund contain any inherent risk?
The scheme involves “Moderate 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 at moderate risk. However, investors should consult their financial advisors, if in doubt about whether the product is suitable for them.
