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

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

The scheme will be replicating/tracking Nifty Next 50 Index Fund.

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

The scheme is mandated to invest 95% to 100% of its total assets in Equity and Equity related securities covered by the Nifty Next 50 Index. The scheme may also hold 0% to 5% of its assets in debt and money market instruments.

To achieve the investment objective, Kotak Nifty Next 50 Index Fund will follow passive investment strategy with investments in stocks in the same proportion as in NIFTY Next 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 Next 50 Index Fund’s performance will be benchmarked against Nifty Next 50 Index TRI (Total Return Index).

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

The NFO opens for subscription on February 17, 2021 and closes on February 24, 2021. The scheme will reopen for continuous sale and repurchase on or before: March 10, 2021.

The minimum subscription amount is Rs 5,000 and in multiples of Re 1 thereafter.

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