Kotak Mutual Fund has introduced the Kotak BSE Sensex Index Fund, an open-ended scheme that aims to replicate or track the BSE Sensex index.
This new fund offer (NFO) will open for subscription on January 27 and close on February 10, 2025. Afterward, the scheme will reopen for continued sale and repurchase starting February 17, 2025.
Investment Objective and Key Features
The main goal of the fund is to provide returns that closely align with the total return of the securities in the BSE Sensex index, before any expenses are deducted.
The scheme will be benchmarked against the BSE Sensex Index (Total Return Index or TRI) and managed by Devendra Singhal, Satish Dondapati, and Abhishek Bisen.
The fund will offer both regular and direct plans, with options for growth and Income Distribution Cum Capital Withdrawal (IDCW). The minimum investment amount for the NFO is Rs 100, and the same amount applies for SIP purchases.
The fund’s portfolio will consist of 95-100% in equity and equity-related securities covered by the BSE Sensex index, with the remaining 0-5% allocated to debt or money market instruments.
The strategy followed will be passive, investing in stocks in the same proportion as the BSE Sensex index.
Expense Ratio and Risk Factors
The maximum total expense ratio (TER) permissible is up to 1%, as per regulation. Additionally, there will be no exit load for investors. However, the riskometer indicates that the scheme’s principal is subject to “very high risk.”
This scheme is ideal for investors looking for long-term capital appreciation and who wish to mirror the performance of the BSE Sensex Index, with the potential for tracking error.
Investment Strategy and Allocation
The fund aims to provide returns in line with the total return of the securities represented by the BSE Sensex index, before expenses.
The scheme follows a passive investment strategy, investing in stocks in the same proportion as the BSE Sensex index. The allocation will be 95-100% in equity and equity-related securities covered by the index, with up to 5% in debt or money market instruments.
