Upcoming NFO: Kotak Mahindra Mutual Fund Files for Nifty India Defence Index Fund

Kotak Mahindra Mutual Fund has filed draft documents with SEBI for the launch of the Kotak Nifty India Defence Index Fund, an open-ended scheme categorised under index funds. The scheme will track the Nifty India Defence Index (Total Return Index).  

The benchmark index includes companies from the Nifty Total Market Index that are either part of defence-related industries or derive at least 10% of their revenue from defence activities.  

Constituents are selected based on 6-month average free-float market capitalisation.  

Investment Allocation and Structure 

According to the draft Scheme Information Document, the fund will invest 95% to 100% of its assets in equity and equity-related securities covered under the Nifty India Defence Index. The remaining 0% to 5% may be invested in debt and money market instruments.  

The scheme may use equity derivatives for limited purposes such as portfolio rebalancing, handling index changes, or managing corporate actions. Non-hedging derivative exposure has been capped at 20% of the equity allocation.  

The draft papers also stated that the scheme will not invest in overseas securities, credit default swaps, securitised debt, commodity derivatives, InvITs, or structured obligations. Short selling of securities has not been permitted under the scheme.  

Investment Details and Costs 

The New Fund Offer (NFO) will have a minimum investment amount of ₹1,000, while systematic investment plans (SIPs) can start from ₹500 with at least 2 instalments. The scheme will not levy any exit load on redemptions.  

Kotak Mahindra Mutual Fund has estimated a maximum base expense ratio of up to 0.90% of the scheme’s daily net assets. The scheme will aim to maintain tracking error within 2%.  

Fund Managers 

Satish Dondapati and Jeetu Valechha Sonar have been named as designated fund managers for the scheme, while Abhishek Bisen will manage the debt component. 

Read More: 12 Equity Mutual Funds Delivered Over 10% Returns in One Year; Midcap and Small Cap Schemes Feature Prominently! 

Conclusion  

The proposed scheme will function as a passive fund tracking the Nifty India Defence Index. The filing also sets out investment limits, derivative exposure norms and minimum investment requirements. 

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