Kotak Mutual Funds recently rolled out a new fund offer for its business cycle fund. The scheme will invest in the stocks as well as sectors that show signs of growth in the business cycle.
The minimum investment for NFO will be ₹5,000. The additional purchase can be made of ₹1,000 and in multiples of Re 1. The minimum amount of SIP is ₹500 (at least a minimum of 10 in a year).
The benchmark for this fund scheme will be Nifty 500 total return index. The fund managers of the scheme will be Pankaj Tibrewal for equity and Abhishek Bisen for debt.
There will be no exit load when there will be redemption or switch up to 10 percent of the initial investment within one year from date of allotment.
But the redemption beyond this will attract one percent of NAV as exit load. After one year, there will be no exit load on the redemption or switch.
Allocation to securities
This is an open-ended thematic equity scheme by Kotak Mahindra Mutual Fund which will invest minimum of 80 per cent of net assets in Equity and equity related securities selected on the basis of business cycle.
Other equity and equity related securities of companies will get an allocation of up to 20 percent. The debt and money market securities will also get an allocation of anywhere between 0-20 percent. At the same time, REIT and InvIT units will get allocation of 0-10 percent.
| Particulars | Details |
| NFO to close | Sept 17 |
| Minimum investment | ₹5,000 |
| Benchmark index | Nifty 500 total return index |
| Max allocation | 80-100% equity based on business cycle |
| Overseas securities | US $ 5 Million (during the NFO) |
As per the indicative allocation, the scheme may invest up to a maximum of 30 percent in units of overseas mutual fund schemes/ ETFs with similar investment objective.
The scheme may invest up to 5 percent of net assets in another scheme of the Kotak Mahindra Mutual Fund or any other Mutual Fund without charging any fees.
There will be two plans under the Scheme namely, direct plan and regular plan based on whether the investor is joining the fund via a distributor or not.
During the NFO, the intended amount for investment in overseas securities is US $ 5 Million and the intended amount for investment in overseas ETFs is US $ 1 Million. The said limits shall be valid for a period of six months from the date of closure of NFO.
Investment approach
The fund would follow top-down approach of portfolio construction to identify stages of business cycle, sector opportunities and subsequently using bottom-up approach to identify strong companies within those sectors.
The portfolio will be focused on few sectors that are likely to do well in a particular business cycle. Subsequently, for identifying companies within those sectors, the portfolio construction will be based on bottom-up stock picking.
The fund manager will evaluate the business environment that a company operates in, the capability of the management to execute and scale up the business and valuation of the company based on fundamentals which include discounted cash flows and PE ratios.
