Mumbai: Kotak Mutual Fund today announced the launch of Kotak India Growth Fund Series 4. This Multi-cap Fund – a 36 months close ended equity scheme investing across large cap, midcap and small cap stocks will open for subscription on January 29, 2018 and close on February 12, 2018.
Units can be purchased during the NFO period at a face value of Rs.10/‐. The fund aims to invest 80% to 100% in Indian equities spread across large cap, mid cap and small cap stocks. It aims to generate capital appreciation from a diversified portfolio across market capitalisation and sectors.
The fund has a unique Put option strategy, through which in a declining market; the scheme would seek to limit downside by purchasing around three years At The Money (ATM) Nifty 50 Put option with strike price around current levels. Thus, a Nifty 50 Put option will increase in value when Nifty goes down from the strike price and vice versa. However, the risk of loss for an option buyer is limited to only the premium paid.
Harsha Upadhyaya, CIO (Equity), said, “Kotak India Growth Fund Series 4 aims to construct a diversified portfolio of stocks across sectors and the flexibility to move across market capitalisation ranges. Combined with a strategy to limit downside using long dated ATM (At The Money) Put option of around three years and staggered unwinding of Put option position in correcting markets to create cash flow for buying stocks at lower levels.”
The minimum amount for investments is Rs. 5000/‐ and thereafter in multiples of Rs.10/‐ and switch-ins (during NFO). The entry load and exit load is NIL. The fund is suitable for lump-sum investment.
Benefits of investing in Kotak India Growth Fund Series 4:
- Riding the India Growth Story. The fund aims to benefit the most by investing in the sectors and companies that ride the India Growth story.
- Flexibility to invest across market caps. The fund would invest across market capitalisation that presents the scope for capital appreciation over the long term.
- Limits downside: The fund will use ~ three-year long Put options if markets corrects
- Opportunistic profit booking: Put Option positions can be sold at a profit in a staggered manner to create cash flow for buying stocks at attractive valuations, if markets correct significantly in the interim period.
About Kotak Mahindra Asset Management
Kotak Mahindra Asset Management Company Limited (KMAMC), a wholly owned subsidiary of Kotak Mahindra Bank Limited (Kotak), is the Asset Manager for Kotak Mutual Fund (KMF). KMAMC started operations in December 1998 and has approximately 12 lakh investors in various schemes. KMF offers schemes catering to investors with varying risk – return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities. The company is present in 76 cities and has 79 branches.