Mutual Fund News : Kotak Mahindra Mutual Fund Introduces Kotak Nifty 50 Index Fund

Publish Date:

Kotak Mahindra Mutual Fund has launched an open-ended equity index scheme - Kotak Nifty 50 Index Fund.

The scheme will be replicating/tracking Nifty 50 Index.

The investment objective of Kotak Nifty 50 Index Fund is to replicate the composition of the Nifty 50 and to generate returns that are commensurate with the performance of the NIFTY 50 Index, subject to tracking errors. However, there is no assurance that the objective of the scheme will be realized.

Kotak Nifty 50 Index Fund is mandated to invest 95% to 100% of its total assets in Equity & Equity related securities covered by the Nifty 50 including Derivatives. The scheme may also hold 0% to 5% of its assets in Debt and Money Market Instruments.

Money Market instruments includes commercial papers, commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, and any other like instruments as specified by the Reserve Bank of India from time to time.

Kotak Nifty 50 Index Fund will invest predominantly in stocks constituting the Nifty 50 Index and / or its exchange traded derivatives and will invest in equity and equity related instruments and debt and money market instruments.

As per the Scheme Information Document, Kotak Nifty 50 Index Fund will follow passive investment strategy with investments in stocks in the same proportion as in NIFTY 50 Index. The investment strategy would revolve around reducing the tracking error to the least possible through rebalancing of the portfolio, taking into account the change in weights of stocks in the index as well as the incremental collections/redemptions from the Scheme.

A small portion of the net assets will be held as cash or will be invested in debt and money market instruments permitted by SEBI/RBI including TREPS or in alternative investment for the TREPS as may be provided by the RBI, to meet the liquidity requirements under the Scheme.

Kotak Nifty 50 Index Fund’s performance will be benchmarked against Nifty 50 Index (Total Return Index).

The fund will be managed by Mr Devender Singhal, Mr Satish Dondapati and Mr Abhishek Bisen.

The NFO opens for subscription on May 31, 2021, and closes on June 14, 2021. The scheme will reopen for continuous sale and repurchase on or before June 28, 2021.

The minimum subscription amount is Rs 100 and in multiples of Re 1 thereafter.

The fund offers Regular Plan and Direct Plan having Growth Option and Income Distribution cum capital withdrawal (IDCW) Option (Payout and Reinvestment).