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Kotak's ETF NFO

Kotak Mahindra AMC has unveiled an ETF focused on the S&P CNX Nifty stocks

Kotak Mahindra Asset Management Company (KMAMC) launched the Kotak Nifty Exchange Traded Fund (ETF), which will focus primarily on stocks in the S&P CNX Nifty index. 

The fund is open-ended and will look to generate returns, before expenses, that correspond to the total returns of the index.

Each unit of the Kotak Nifty ETF will approximately be equal to 1/10th of the value of the S&P CNX Nifty. 

“The addition of Kotak Nifty ETF strengthens our ETF product suite. It will provide diverse investment options to cater to the requirement of our investors. Kotak Nifty ETF caters to each and every class of investor – from long-term investors to arbitrageurs, institution and FIIs, while offering the advantages of portfolio diversification, low cost, trading flexibility and minimal tracking error,” Kotak Mahindra AMC CEO, Sandesh Kirkire said. 

The minimum investment amount during the New Fund Offer (NFO) is Rs 10,000 and in multiples of Rs 1,000 thereafter. 

For those investors wanting to switch into the scheme from existing scheme/plan/options, during the NFO stage, the minimum investment amount is Rs 10,000 and in multiples of Re 0.01 thereof.

The New Fund Offer (NFO) will be open for subscription from January 11, 2010 to January 19, 2010.

There will be no entry or exit loads charged for the scheme.

Sajit Pisharodi is the fund manager for the scheme.

KMAMC, a wholly owned subsidiary of Kotak Mahindra Bank Limited, is the asset manager for Kotak Mahindra Mutual Fund (KMMF). KMAMC started operations in December, 1998. 

KMMF currently manages assets in excess of Rs 40,000 crore, contributed by 11.16 lakh investors (as on December 31, 2009).

Similar Product

The other similar product is by Benchmark MF and is called the Nifty Benchmark ETS. It was launched in December, 2001 and is an open-end fund. It has net assets of Rs 447.05 crore and trailing 5-year returns of 22.69, which just about beats the category returns. Value Research Fund Ratings has allotted it a 4-star rating. It has also beaten the S&P CNX Nifty index returns, which are at 21.88 per cent over the 5-year period. The fund suffered a terrible 2008, when it dropped as much as 51.28 per cent.

The other fund in the same space is UTI Sunder. It was launched in July, 2003 and has an above average return grade. Its return since launch has been 30.48 per cent. Its net assets add up to Rs 6.35 crore.

Other Kotak ETFs

Kotak Sensex ETF

This is an open-ended fund, it aims to provide returns that correspond to the total returns of BSE Sensex. It has been benchmarked against Sensex. 

Kotak Gold ETF 

An open-ended fund, it aims to provide returns that closely correspond to the return provided by the price of gold through investment in physical gold in domestic market. It is benchmarked against London Gold. 

Kotak PSU Bank ETF 

An Open Ended fund, its objective of the scheme is to provide returns that correspond to the total returns of CNX PSU Bank Index. It has been benchmarked against CNX PSU Bank.