NFO Alert: Kotak Mahindra Mutual Fund launches Kotak Healthcare Fund; all you need to know

Kotak Mahindra Mutual Fund announced the launch of the Kotak Healthcare Fund. The scheme opened for public subscription on November 20, 2023, and will close on December 04, 2023. The scheme re-opens for continuous sale and repurchase on or before December 18, 2023.

What kind of mutual fund scheme is this?

This is an open-ended equity scheme investing in pharma, healthcare & allied sectors. This product is suitable for investors seeking

• Long-term capital growth
• Investment in a portfolio of predominantly equity and equity-related securities of companies engaged in pharma, healthcare & allied sectors.

Shibani Kurian, Senior Executive Vice President, KMAMC said, “The fund provides investors an opportunity to participate in the immense potential of India's healthcare industry. The sector is undergoing a significant transition, driven by rising incomes and greater health awareness reshaping the way Indians prioritise their health. As incomes rise and awareness of health and wellness increases, there is a growing demand for quality healthcare services and products.”

What is the main objective of investing in this fund?

The scheme aims to achieve long-term capital appreciation by investing in equity and equity-related securities of companies directly or indirectly involved in the pharmaceutical, healthcare, and related sectors. It’s important to note that there is no guarantee that the scheme will achieve its objective.

Nilesh Shah, Managing Director, KMAMC said, “We are offering the Kotak Healthcare Fund to provide our investors with an opportunity to participate in India’s healthcare sector. The Indian healthcare sector is poised for robust long-term growth driven by domestic demand, rising exports, and the shift from unorganized to organized healthcare services. Changing demographics and lifestyles are also expected to drive healthcare demand. Kotak Healthcare Fund offers investors an avenue to benefit from the structural opportunities in this space.”

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹5000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, many asset management companies (AMCs) have launched such healthcare funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. These include:

How will the scheme benchmark its performance?

The performance of the scheme is measured against Nifty Healthcare Index (Total Return Index). The Nifty Healthcare Index is designed to reflect the behaviour and performance of healthcare companies. The Nifty Healthcare Index comprises of maximum of 20 tradable, exchange-listed companies. The composition of the aforesaid benchmark is such that, it is most suited for comparing the performance of the scheme. The trustees reserve the right to change benchmarks in the future for measuring the performance of the scheme and as per the guidelines and directives issued by SEBI from time to time.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be calculated as under

- For redemption /switch out within 30 days from the date of allotment: 1%

- If units are redeemed or switched out on or after 30 days from the date of allotment: NIL

Who will manage this scheme?

Shibani Sircar Kurian, Dhananjay Tikariha, Arjun Khanna, and Abhishek Bisen are the designated fund managers of this scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.