Publish Date:
Kotak Mutual Fund introduces – Kotak Nifty Financial Services Ex-Bank Index Fund
It is an open-ended scheme replicating/tracking Nifty Financial Services Ex-Bank Index.
Accordingly, the investment objective of the scheme is to replicate the composition of the Nifty Financial Services Ex-Bank Index and to generate returns that are commensurate with the performance of the Nifty Financial Services Ex-Bank Index, subject to tracking errors. However, there is no assurance that the objective of the scheme will be realized. The scheme does not assure or guarantee any returns.
Under normal circumstances, Kotak Nifty Financial Services Ex-Bank Index Fund will hold an allocation of 95% to 100% of its assets in Equity and Equity related securities covered by the Nifty Financial Services Ex-Bank Index and 0% to 5% in Debt & Money Market Instruments.
As per the Scheme Information Document, Kotak Nifty Financial Services Ex-Bank Index Fund will follow passive investment strategy with investments in stocks in the same proportion as in Nifty Financial Services Ex-Bank 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.
The scheme being a passive investment carries lesser risk as compared to active fund management. The portfolio follows the index and therefore the level of stock concentration in the portfolio and its volatility would be the same as that of the index, subject to tracking error. Thus there is no additional element of volatility or stock concentration on account of fund manager decisions.
Kotak Nifty Financial Services Ex-Bank Index Fund’s performance will be benchmarked against Nifty Financial Services Ex-Bank Index.
The scheme will be managed by Mr Devender Singhal, Mr Satish Dondapati and Mr Abhishek Bisen.
The NFO opens for subscription on July 24, 2023 and closes on August 07, 2023. The schemes will reopen for continuous sale and repurchase within five business days from the date of allotment.
The fund's face value is Rs 10/- per unit. The minimum subscription amount is Rs 1,000/- and in multiples of Re. 1/- thereof.
The scheme offers Regular Plan and Direct Plan each plan offers Growth and Income Distribution cum capital withdrawal option (IDCW) option.