Kotak Emerging Equity Scheme is a three year close ended equity. It intends to invest predominantly in mid and small-sized companies. Hence, the scheme has been targeted at the long term investors who are looking for capital appreciation of their money.
The fund will use the definition of Value Research, for the purpose of classification of companies in large, mid and small cap categories. As per this definition large cap companies are defined as the least number of stocks out of the ones listed on BSE that account for 70 per cent of the total market capitalisation; those between 70 and 90 per cent are classified as mid caps and those accounting for the remaining 10 per cent are classified as Small Caps.
The fund intends using a bottom up approach to investing, by identifying stocks that are priced at a discount to their intrinsic value. Consequently the strategy will not have a sector bias.
The scheme will offer redemptions before the maturity period at the end of every quarter. The first such liquidity window will open six months after the closure of subscription. The last five working days at the end of each quarter have been earmarked for such redemptions. Investors that make a premature redemption will have to bear the proportionate unamortised issue expenses.
The fund house had launched a similar open-ended fund, Kotak Mid-Cap in January 2005, which is also managed by Nikunj Doshi. It has posted a decent 40 per cent return (as on February 14, 2007) since launch. The last one year, though, has not been that good. It has returned 17.08 per cent over the one year period ending February 14, 2007 compared to the category average of 23.18 per cent.
Unit cost during NFO: Rs 10
Type of fund: Close-ended
Options: Growth, Dividend Payout, Reinvestment
Minimum investment: Rs. 5,000
Benchmark: BSE Mid Cap
Fund Manager: Nikunj Doshi
Offer opened: February 12, 2007
Offer closes: March 12, 2007