The Kotak Nifty Financial Services Ex-Bank Index Fund, an open-ended scheme tracking the Nifty Financial Services Ex-Bank Index, opened for subscriptions today, July 24, 2023.
The new fund offer (NFO) runs from July 24 to August 7, 2023.
The fund will invest in the top 30 companies of the financial services sector, except banks; and each stock is based on a free-float market capitalisation that is part of the Nifty 500 Index.
The Kotak Mahindra AMC said the fund offers investors diverse investment opportunities across sectors, such as NBFC, HFC, Insurance, Broking, AMC, Fintech, etc., and a cost-effective and transparent approach to investing in the Indian stock market by replicating the index.
Commenting on the product, Nilesh Shah, the managing director of Kotak Mahindra AMC, said, “The Kotak Nifty Financial Services Ex-Bank Index Fund 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. This sectoral index fund further strengthens our overall passive fund offerings.”
Each unit during the NFO period is priced at Rs 10. The scheme will re-open for continuous sale and repurchase within five business days from the date of allotment of units, on or before August 23, 2023. The minimum subscription amount for non-systematic investment plans (SIPs) is Rs 5,000, and after that, in multiples of Rs 1 for purchases and of Re 0.01 for switches. For the SIP purchase, it is Rs 500, subject to a minimum of 10 SIP instalments of Rs 500 each.
The product is suitable for those looking for long-term capital gains. The stocks in the portfolio comprise the underlying benchmark index. However, as in other mutual fund plans, this scheme also comes with risks like price and interest rate fluctuations, volatility, liquidity issues, etc. Investors should study all documents carefully and consult a qualified advisor before choosing.
According to the AMC, around 95-100 per cent of the assets will be allocated to equity and equity-related securities covered by the Nifty Financial Services Ex-Bank Index, hence the risk profile of the scheme is very high. Also, it will invest in debt and money-market instruments up to 0-5 per cent, carrying low to moderate risks.