BackNFO Alert: Kotak Mahindra Mutual Fund launches Kotak Consumption Fund; all you need to know
Kotak Mahindra Mutual Fund announced the launch of the Kotak Consumption Fund. The scheme opened for public subscription on October 25, 2023, and will close on November 08, 2023.
Premium
Kotak Mahindra Mutual Fund announced the launch of the Kotak Consumption Fund. The scheme opened for public subscription on October 25, 2023, and will close on November 08, 2023. The scheme re-opens for continuous sale and repurchase within five business days from the date of allotment.
What kind of mutual fund scheme is this?
This is an open-ended equity scheme following the consumption theme.
Commenting on the launch, Nilesh Shah, Managing Director, KMAMC said, “With the launch of Kotak Consumption Fund, we are offering a window for our investors to be a part of the country’s fast-evolving consumption story. It’s about tapping into the shift from basic to smart - from analog to digital, from feature phones to smartphones, and from single-brand to multi-brand retail choices. This change reflects not just a change in buying capacity, but also a shift in aspirations. We offer this fund for our investors who want to be a part of the country’s growing consumption story and are looking for resilient sectors."
What is the main objective of investing in this fund?
The investment objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity-related securities of companies engaged in consumption and consumption-related activities. However, there is no assurance that the objective of the scheme will be achieved.
According to Devender Singhal, EVP, KMAMC, “Country’s consumption story is still unfolding. The consumption potential is driven by our country’s rising income, strong digital revolution, unique demographic makeup, and changing consumer trends. The Kotak Consumption Fund offers investors an avenue to participate in our nation’s aspirations, targeting investments in the opportunities within the resilient consumption sector."
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 net assets) of the scheme’s portfolio will be as follows:
| Instruments | Indicative allocations (% of total assets) | Risk Profile | |
Minimum | Maximum | ||
Equity and Equity Related Securities of companies engaged in Consumption and Consumption related activities | 80% | 100% | Very High |
Equity and Equity Related Securities of companies other than those engaged in Consumption and Consumption related activities | 0% | 20% | Very High |
Overseas Mutual Funds schemes / ETFs / Foreign Securities | 0% | 20% | Very High |
Debt and Money Market Securities | 0% | 20% | Low to Moderate |
Units of REITs & InvITs | 0% | 10% | Very High |
Are there similar mutual funds in the market?
To date, many other asset management companies (AMCs) in India have launched similar mutual funds, yielding good returns surpassing not only the inflation rate but also helping investors create wealth in the long run.
Name of the fund | Five-year returns (in %) |
SBI Consumption Opportunities Fund | 23.43 |
Nippon India Consumption Fund | 23.39 |
Mirae Asset Great Consumer Fund | 21.21 |
Canara Robeco Consumer Trends Fund | 19.86 |
Baroda BNP Paribas India Consumption Fund | 19.69 |
Tata India Consumer Fund | 18.99 |
Aditya Birla Sun Life India GenNext Fund | 18.77 |
Sundaram Consumption Fund | 18.59 |
| Source: AMFI (Data as of October 25, 2023) | |
How will the scheme benchmark its performance?
The performance of the Scheme is measured against the Nifty India Consumption Index (Total Return Index).
The NIFTY India Consumption Index is designed to reflect the behaviour and performance of a diversified portfolio of companies representing the domestic consumption sector which includes sectors like consumer non-durables, healthcare, auto, telecom services, pharmaceuticals, hotels, media & entertainment, etc. The NIFTY India Consumption Index comprises 30 companies listed on the National Stock Exchange (NSE).
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 the benchmark 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 be calculated as under:
-For redemption/within 30 days from the date of allotment: 1%.
- If units are redeemed or switched out on or after one year from the date of allotment: NIL
The units issued on reinvestment of IDCW shall not be subject to entry and exit load.
Who will manage this scheme?
Devender Singhal will be the fund manager for the equity investment of the scheme. Abhishek Bisen will be the fund manager for debt investment of the scheme and Arjun Khanna will be the dedicated fund manager for investments in foreign securities.
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.
Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.
