Mutual Fund News : Kotak Mahindra Mutual Fund Introduces Kotak ESG Opportunities Fund

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Kotak Mahindra Mutual Fund has launched an open ended equity scheme – Kotak ESG Opportunities Fund.

It is a thematic fund that will focus on investing in companies identified based on the Environmental, Social and Governance (ESG) theme.

The investment objective of the scheme is to generate capital appreciation by investing in a diversified portfolio of companies that follow Environmental, Social and Governance parameters. However, there can be no assurance that the investment objective of theScheme will be realized.

Under normal circumstances, 80% to 100% of the funds portfolio will be invested in Equity and equity related instruments of companies following Environmental, Social and Governance (ESG) criteria (including derivatives and foreign securities). It can invest up to 20% of its assets in Equity & Equity related securities of other companies.

The fund can also hold up to 20% of its assets in Debt& Money Market Instruments, and has flexibility to invest up to 10% of its assets in Units issued by REITs and InvITs.

Kotak ESG Opportunities Fund will, through internal diligence and/or in consultation with external advisors, identify stocks whichhave an ESG orientation in the opinion of the fund manager.ESG stands for Environmental, Social and Governance. These ESG factors offer fund manager added insight into the quality of a company’s management, culture, risk profile and other characteristics.

For the purpose of this scheme, such companies would be considered as falling within the ESG ambit whichhave prudent policy, process and practice with regard to environment, social development and corporategovernance. The fund management may use external data providers to understand ESG parameters and get scores for companies.

For companies which lack such data, the fund manager and research analysts may engage with the companydirectly to seek more clarity on ESG parameters before deciding on its inclusion in the universe. The fundmanager would be guided by ESG scores but not restrained by them and can use his discretion to decide oncompanies which are long term sustainable businesses with good ESG practices.

Based on the ESG criterion, the fund manager would identify a list of companies. The final selection of stocks &sectors would be driven primarily by the growth prospects and valuations of the businesses over a medium tolong term as per the discretion of the fund manager within this universe.

The said universe of ESG compliant stocks may be re-assessed from time to time to update and evaluate thecontinuity and sustainability of the company and its adherence to the ESG norms as understood by the AMC.

The scheme’s performance will be benchmarked against Nifty 100 ESG Index TRI (Total Return Index).

The fund will be managed by MrHarsha Upadhyaya, whereas MrArjun Khanna will be the dedicated fund manager for managing investments in foreign securities.

The NFO opens for subscription on November 20, 2020 and closes on December 04, 2020. The scheme will reopen for continuous Sale and Repurchase on or before: December 18, 2020.

The fund’s NAV is priced at Rs 10/- per unit during the NFO period. The minimum subscription amount is Rs 5,000 and in multiples of Rs 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Dividend Option (Dividend Re-investment and Dividend Pay-out facilities).