Mutual funds: Kotak Mahindra AMC launches Kotak Nifty Financial Services Ex-Bank Index Fund. Here is how to apply

Kotak Mahindra Asset Management Company announced the launch of Kotak Nifty Financial Services Ex-Bank Index Fund, an open-ended scheme that tracks the Nifty Financial Services Ex-Bank index.

Nifty Financial Services Ex-Bank Index will invest in the top 30 financial services companies, except banks. The weighting of each stock is based on free-float market capitalisation and is part of the Nifty 500 Index. By replicating the index, the fund offers investors diverse investment opportunities across sectors such as NBFC, HFC, Insurance, Broking, AMC, Fintech, etc. It offers a cost-effective and transparent approach to investing in the Indian stock market. This is a new scheme and does not have any performance track record.

The scheme opens for public subscription on July 24, and closes on August 7. Devender Singhal, Satish Dondapati and Abhishek Bisen are the fund managers.

Nilesh Shah, Managing Director of KMAMC, said, “The Kotak Nifty Financial Services Ex-Bank Index Fund launch is aligned with our commitment to offering products that cater to different risk appetites and investment horizons. This fund provides an opportunity for investors to participate in the potential growth of the financial services sector, excluding banks. With the launch of this sectoral index fund, we further strengthen our overall passive fund offerings.”

The scheme’s investment objective is to replicate the composition of the Nifty Financial Services Ex-Bank Index and generate returns commensurate with the performance of the Nifty Financial Services Ex-Bank Index, subject to tracking errors.

Where will the scheme invest? 

The scheme will invest in the following securities as per the limits specified in the asset allocation table of the scheme, subject to SEBI (MF) Regulations.

a. The scheme’s net assets will be invested in stocks constituting the Nifty Financial Services Ex-Bank Index and/or its exchange-traded derivatives. This would be done by investing in almost all the stocks comprising the Nifty Financial Services Ex-Bank Index in approximately the same weightage that they represent in the Nifty Financial Services Ex-Bank Index and/or investing in derivatives, including futures contracts and options contracts on the index.

b. The scheme may take derivatives or index derivatives position subject to the guidelines issued by SEBI from time to time and in line with the overall investment objective of the scheme.

c. Equity and equity-related securities, including convertible bonds, debentures, and warrants carrying the right to obtain equity shares.

d. Securities created and issued by the Central and State Governments and/or repos/reverse repos in such Government Securities as may be permitted by RBI (including but not limited to coupon-bearing bonds, zero coupon bonds and treasury bills).

e. Debt obligations of domestic Government agencies and statutory bodies, which may or may not carry a Central/State Government guarantee (including but not limited to Indian Government Bond, State Development Loans issued and serviced at the Public Debt Office, Bonds issued by Central & State Government PSU’s which are guaranteed by Central or State Governments)

f. Corporate debt (of both public and private sector undertakings), including Non-convertible debentures (including bonds) and non-convertible part of convertible securities having residual maturity of up to 91 days.

g. Units of Mutual Fund Schemes;

h. Reverse repos in such Government Securities as may be permitted by RBI;

i. Short Term Deposits of banks (both public and private sector) and development financial institutions to the extent permissible under SEBI Regulations;

j. Money market instruments permitted by SEBI/ RBI, having maturities of up to one year but not limited to: Certificate of Deposits (CDs), Commercial Paper (CPs) and Triparty repo on Government securities or treasury bills, Bills re-discounting, as SEBI may permit.

k. Securities Lending as permitted by SEBI from time to time.

How to apply 

The application form and Key Information Memorandum may be obtained from the offices of AMC or Investor Service Centres (ISCs)/Official Points of Acceptance (OPAs) of the Registrar or distributors or downloaded from the Kotakmf website. Investors should refer to Statement of Additional Information before submitting the application form.

The list of the Investor Service Centres (ISCs)/Official Points of Acceptance (OPAs) of the Mutual Fund will be available on the Kotakmf website. All cheques and drafts should be crossed “Account Payee Only” and drawn in favour of the scheme viz: Kotak Nifty Financial Services Ex-Bank Index Fund.

The AMC reserves the right to reject any application, among other things, in the absence of fulfilment of any regulatory requirements, fulfilment of any requirements as per the SID, incomplete/incorrect documentation, and not furnishing necessary information to the satisfaction of the Mutual Fund/AMC.