Kotak Mutual Fund announced the launch of the Kotak Multi Asset Allocation Fund, an open-ended scheme investing in equity, debt & money market instruments, commodity ETFs, and exchange-traded commodity derivatives.
The scheme opened for public subscription on August 31, 2023, and will close on September 14, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment of units on or before October 03, 2023.
What kind of mutual fund scheme is this?
This is an open-ended scheme investing in equity, debt & money market instruments, commodity ETFs, and exchange-traded commodity derivatives.
Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company said, “We are excited to announce the launch of Kotak Multi Asset Allocation Fund. This Fund is an outcome of investors’ need for a holistic asset allocation solution that would diversify across various asset classes and navigate different economic cycles. We call this our ‘Load It, Latch It, Leave It’ fund, wherein our proficient team of fund managers come together to strategize asset allocation with the collective expertise across asset classes.”
What is the main objective of investing in this fund?
The investment objective of the scheme is to generate long-term capital appreciation by investing in equity & equity-related securities, debt & money market instruments, commodity ETFs, and exchange-traded commodity derivatives.
Devender Singhal, EVP, KMAMC and Fund Manager for Kotak Multi Asset Allocation Fund said, “The beauty of multi-asset investing is its resilience - no single asset dictates the outcome, we endeavour to tap into the potential of each asset class. We're not just selecting securities; we're building a diversified portfolio aimed at reasonable risk-adjusted returns with moderated volatility. This fund also offers dynamism with an endeavour to increase the net equity allocation when markets are cheap and decrease when markets are expensive.”
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 Instruments | 65% | 80% | Very High |
Debt and money market instruments and cash | 10% | 25% | Very High |
Commodity ETFs, Exchange Traded Commodity Derivatives (ETCDs) & any other mode of investment in commodities as permitted by SEBI from time to time | 10% | 25% | Very High |
Overseas mutual funds schemes/ ETFs/Foreign Securities | 10% | 15% | Low to Moderate |
Units issued by REITs and InvITs | 0% | 10% | Very High |
Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such multi-asset funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:
Name of the fund | Five-year returns (in %) |
| Quant Multi Asset Fund | 21.65% |
ICICI Prudential Multi-Asset Fund | 15.40% |
HDFC Multi-Asset Fund | 11.92% |
Axis Multi Asset Allocation Fund | 11.42% |
SBI Multi Asset Allocation Fund | 10.67% |
UTI Multi Asset Fund | 8.80% |
| Source: MoneyControl | |
How will the scheme benchmark its performance?
The performance of the Scheme is benchmarked against NIFTY 500 TRI (65%) + NIFTY Short Duration Debt Index (25%) + Domestic Price of Gold (5%) + Domestic Price of Silver (5%).
The benchmark index is designed to reflect the behaviour and performance of all three asset classes. 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 benchmarks in the future for measuring the performance of the scheme and as per the guidelines and directives issued by SEBI from time to time.
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 charged as under:
- For redemption / switch out of up to 30% of the initial investment amount (limit) purchased or switched in within 1 year from the date of allotment: Nil.
- If units redeemed or switched out are in excess of the limit within one year from the date of allotment: 1%.
- If units are redeemed or switched out on or after one year from the date of allotment: NIL.
The AMC reserves the right to revise the load structure from time to time. Such changes will become effective prospectively from the date such changes are incorporated.
Who will manage this scheme?
Devender Singhal will be the fund manager for the equity investment of the scheme, Abhishek Bisen will be the fund manager for debt investment of the scheme, Hiten Shah will be the fund manager for arbitrage investment of the scheme, Jeetu Valechha Sonar will be the dedicated fund manager for commodities investments of the scheme and Arjun Khanna will be the dedicated fund manager for investments in foreign securities.
Does the fund contain any inherent risk?
The scheme involves “Very High Risk” as per the details mentioned in theScheme 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.
