Kotak Mahindra Mutual Fund announced the launch of the Kotak Nifty Financial Services Ex-Bank Index Fund, an open-ended scheme replicating/tracking the Nifty Financial Services Ex-Bank Index.
The scheme opened for public subscription on July 24, 2023, and will close on August 07, 2023. The scheme re-opens for ongoing sale and repurchase within five business days from the date of allotment of units on or before August 23, 2023.
Q. What kind of mutual fund scheme is this?
This is an open-ended scheme replicating/tracking the Nifty Financial Services Ex-Bank Index. The product is best suited to investors seeking
- Long-term capital appreciation
- Investment in stocks comprising the underlying index and endeavours to track the benchmark index
Q. What is the main objective of investing in this fund?
The investment objective of the scheme is to replicate the composition of the Nifty Financial Services Ex-Bank Index and to generate returns that are commensurate with the performance of the Nifty Financial Services Ex-Bank Index, subject to tracking errors. However, there is no assurance that the objective of the scheme will be realized. The scheme does not assure or guarantee any returns.
Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company said, “At Kotak Mutual Fund, we continually strive to provide our investors with diverse investment solutions. The launch of the Kotak Nifty Financial Services Ex-Bank Index Fund is aligned with our commitment to offering products that cater to different risk appetites and investment horizons. This fund provides an opportunity for investors to participate in the potential growth of the financial services sector excluding banks. With the launch of this sectoral index fund, we further strengthen our overall passive fund offerings.”
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. 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 securities covered by the Nifty Financial Services Ex-Bank Index | 95% | 100% | Very High |
Debt & Money Market Instruments | 0% | 5% | Low to Moderate |
Q. Are there similar mutual funds in the market?
To date, no asset management company has launched any such fund that tracks the Nifty Financial Services Ex-Bank Index.
Q. How will the scheme benchmark its performance?
The performance of the scheme is measured against Nifty Financial Services Ex-Bank Index (Total Return Index).
The index is designed to reflect the behaviour and performance of a portfolio of stocks from the financial services sector other than banks. The largest 30 stocks from eligible basic industries are chosen based on a six-month average free-float market capitalization. Index stock weights are based on their free-float market capitalization.
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 also be “Nil”.
Q. Who will manage this scheme?
Devender Singhal, Satish Dondapati, and Abhishek Bisen will be the fund managers for the scheme.
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.
