Kotak Mutual Fund Files Draft for Nifty Alpha Low-Volatility 30 Index Fund

Kotak Mutual Fund has submitted draft documents for the launch of the Nifty Alpha Low-Volatility 30 Index Fund. The scheme aims to replicate the performance of the Nifty Alpha Low-Volatility 30 Index by investing in its constituent stocks and related instruments.

The filing outlines the investment strategy, asset allocation, and permissible instruments under SEBI regulations. Key details such as the launch date, minimum investment amount, and expense ratio will be announced after regulatory approval.

Investment Objective and Strategy

The scheme will primarily invest in stocks that form part of the Nifty Alpha Low-Volatility 30 Index. Investments will be made in approximately the same weightage as represented in the index to ensure close tracking.

The fund may also use exchange-traded derivatives such as futures and options on the index to manage exposure and optimise returns. This approach aligns with SEBI guidelines and the overall objective of providing investors exposure to a diversified portfolio of low-volatility, high-alpha stocks.

Permissible Instruments Under SEBI Norms

Apart from index constituents and derivatives, the scheme may invest in equity-related instruments, including convertible bonds, debentures, and warrants. It can also allocate funds to government securities such as coupon-bearing bonds, zero-coupon bonds, and treasury bills.

Corporate debt instruments, including non-convertible debentures with residual maturity of up to 91 days, are permitted. Additionally, the scheme may invest in units of other mutual fund schemes, short-term bank deposits, and money market instruments like certificates of deposit and commercial paper.

Risk Management and Compliance

The draft specifies that the scheme will adhere to SEBI’s risk management framework for derivatives and debt instruments. Securities lending may be undertaken as permitted by SEBI to enhance portfolio returns.

Repo and reverse repo transactions in government securities will be allowed within regulatory limits. All investments will be subject to asset allocation norms and internal compliance checks to maintain transparency and investor protection.

Read More: Indian Mutual Fund and Equity Assets Projected to Grow Sixfold.

Conclusion

Kotak Mutual Fund’s draft filing for the Nifty Alpha Low-Volatility 30 Index Fund marks a step toward expanding its passive investment offerings. The scheme will track a specialised index combining alpha and low volatility, using a mix of equities, derivatives, and debt instruments within SEBI norms.

Investors will gain clarity on subscription details once regulatory approvals are complete. The fund aims to provide a structured, rule-based investment option for long-term equity exposure.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.