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Kotak Mutual Fund is launching a new income fund, Kotak FMP Series 293 – 1826 days, that invests in money market and debt securities intending to reduce interest rate risk.
The New Fund Offer (NFO) period for the Baroda Business Cycle Fund is from 26th August 2021 to 01st September 2021.
Objective
The fund’s primary objective is to generate returns by investing in debt instruments and money market securities maturing on or before the scheme matures. Through its asset allocation, it aims to reduce interest rate risk. The scheme doesn’t assure that the primary objective of the fund will be realized.
Kotak FMP Series 293 – 1826 days New Fund Offer Details
| Baroda Business Cycle Fund | Details |
| NFO Opening Date | 26th August 2021 |
| NFO Closing Date | 01st September 2021 |
| Type of Fund | Closed-ended Debit Scheme, Income |
| Fund Manager | Mr Deepak Agarwal |
| Minimum Investment Amount | INR 5,000 |
| Exit Load | Nil |
| Suitability | Low to Medium |
| Benchmark | NIFTY Medium to Long DurationDebt Index |
| Plans and Options | Regular Plan & Direct Plan |
Fund manager
Mr Deepak Agarwal
Mr Agarwal is the fund manager of Kotak FMP Series 293-1826 Days. He has been associated with Kotak AMC since 2002. Before working as a fund manager from November 2006 in Kotak AMC, he was in research and dealing. He holds a PG in Commerce from Mumbai University. He is also a CFA, CA and a Company Secretary.
Asset allocation
Kotak FMP Series 293-1826 days fund majorly invests in debt instruments and money market securities. The fund’s portfolio is constructed to maintain a high-quality portfolio and manage credit risk. It considers rating agencies’ ratings, credit premium over the price of sovereign security, rating migration, and general economic conditions. Following is the indicative asset allocation of the fund.
| Types of Instruments | Indicative Allocation Minimum | Indicative Allocation Maximum | Risk Profile |
| Debt Instruments (including Government Securities) | 80% | 100% | Low to Medium |
| Money Market Instruments | 0% | 20% | Low to Medium |
The portfolio of the fund heavily relies on the fund manager’s opinion. Suppose the fund manager believes that the instruments are of acceptable credit risk and with a minimum chance of default. In that case, he will invest in them. Moreover, the fund manager will only take the ratings given by different agencies as a guide and not as restraints for investing.
Who can invest?
Kotak FMP Series 293-1826 invests in money market and debt securities. It is a low-risk investment and aims to reduce interest rate risk. Hence investors seeking for stable and predictable returns can invest in this scheme.
The scheme is closed-ended and matures only after 1826 days or five years from the date of allotment. So, investors who can stay invested during this lock-in period can invest in the fund. However, investors can sell their units of the fund on the stock exchange during trading days as the fund will be listed on BSE.
The units of the fund can be held in Demat format in addition to the account statement. However, investors who intend to hold the units in demat format must have a Demat account.
Concluding Remarks
Kotak FMP Series 293-1826 Fund is a closed-ended income fund that invests in debt and money market instruments intending to reduce interest rate risk. The fund house will strive to achieve the investment objective with a judicious portfolio mix of money market, debt and government securities.
The fund managers will also assess every opportunity with regard to interest rate risk, credit risk, and liquidity risk. Since the fund invests in debt instruments, investors with a low understanding of risk can invest in the fund. The fund has a fixed tenure of 5 years, but the units can be sold on the stock market. The fund doesn’t guarantee any returns. It is better to consult an advisor to see if the fund fits the investor’s objectives and goals.
Explore Other Income Funds
- SBI Magnum Income Fund
- HDFC Income Fund
- UTI Short Term Income Fund
- JM Income Fund
- Canara Robeco Income Fund
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