NFO Alert: Kotak Mutual Fund Introduces BSE Sensex Index Fund

Kotak Mutual Fund Introduces Kotak BSE Sensex Index Fund which is an open-ended scheme replicating/tracking the BSE Sensex Index. Kotak Mutual Fund is an Indian mutual fund which is managed by Mahindra Asset Management Company (KMAMC). The fund provides a variety of mutual fund schemes, which include equity, debt and hybrid schemes.

The NFO (New Fund Offer) of the scheme is going to open for subscription on January 27 and will close on February 10. You will be able to buy or sell units of the scheme again starting February 17.

The main goal of this fund is to give returns that match the total returns of the securities in the underlying index, after deducting expenses and accounting for minor tracking differences.

The scheme will follow the BSE Sensex Index (Total Return Index (TRI)) as its benchmark. Both regular and direct plans will be available, with options for growth and Income Distribution cum Capital Withdrawal (IDCW). It will be managed by Devender Singhal, Satish Dondapati, and Abhishek Bisen.

The minimum investment in this fund is Rs.100, and you can invest any amount over and above it. For the SIP purchase, the minimum is Rs.100 with no maximum amount limit. The plan intends to allocate 95-100% of its corpus into equity and similar instruments that track the BSE Sensex Index, and 0-5% of it will go into debt or money market instruments.

The maximum TER allowed under Regulation 52(6)(b) is up to 1%. There will be no exit load for this scheme. However, the principal amount invested will be categorized as “very high risk” based on the scheme’s riskometer.

This scheme is relevant for those investors who are looking for long-term capital appreciation and returns that match the performance of the BSE Sensex Index and there may be small differences due to tracking error.

Over the past 24 years, the BSE Sensex Index has given an average annual return of 16%. If you had invested Rs.1 lakh in the index in 2000, it would have grown to Rs.21 lakh by 2024. The index has made profits in 19 out of the last 24 years.