Kotak Bond-STP(G)

Performance

Kotak Mahindra Mutual fund is a wholly-owned subsidiary of Kotak Mahindra Bank Limited and began its operations in December 1998. Kotak Mahindra Asset Management Company Limited (KMAMC) is the fund manager of Kotak Mahindra Mutual Fund which has around 7.5 lakh investors across 80 cities. Kotak Mahindra Mutual Fund offers schemes across various asset categories of equity, hybrid, debt, etc.

The Kotak Bond Short Term Plan - Growth is an open-ended short term debt scheme that invests in securities so that the portfolio’s Macaulay Duration is between 1 year and 3 years. The growth option of the scheme helps investors to grow their capital by the end of the scheme period.

Investment Objective

To offer optimal returns and high liquidity to the investor through investments in debt securities such as debentures, bonds, and government securities. The scheme will also make investments in money market securities such as certificates of deposit, treasury bills, commercial papers, repos, etc.

Key Features of the Scheme

The Kotak Bond Short Term Plan is ideal for investors who wish to receive income over a medium term and exhibits the below features:

Investment amount for Kotak Bond Short Term Plan

Asset Allocation for Kotak Bond Short Term Plan

Who can invest in Kotak Bond Short Term Plan?

The following persons/entities can apply for subscription to the units of Kotak Bond Short Term Plan:

• Individuals residing in India aged above 18 years, either singly or jointly (cannot exceed 3)
• Corporate bodies and firms registered in India
• Parents or legal guardians on the minor’s behalf
• Co-operative and registered societies permitted to invest
• Partners of Partnership Firms
• Statutory/Public corporations and Public Sector Undertakings (PSUs)
• Charitable and religious trusts, and trustees of private trusts
• Body of Individuals or Association of Persons
• Hindu Undivided Families
• SEBI registered mutual funds
• Regional rural banks, co-operative banks, and other banks
• Investment Institutions and Financial Institutions
• Government of India approved International Multilateral Agencies
• Foreign Institutional Investors or SEBI registered sub-accounts of FIIs
• Foreign Portfolio Investors
• Navy/Army/Air Force, paramilitary units and other eligible institutions
• Scientific and Industrial Research Organisations
• Persons of Indian Origin/Non-Resident Indians on repatriation or non-repatriation basis
• Pension/Provident/Gratuity and such other funds as and when allowed to invest
• Universities and Educational Institutions
• Public Financial Institution as defined under the Companies Act 2013
• Educational institutions and universities
• Other schemes of Kotak Mahindra Mutual Fund

NAV Disclosure and Benchmark for Kotak Bond Short Term Plan

The scheme’s NAV is obtained by dividing the scheme’s net assets by the number of outstanding units on the date of valuation. The NAV will be calculated up to 4 decimal places and disclosed at the end of every business day. The NAV will be updated on the website of AMFI (www.amfiindia.com) and website of Kotak Mahindra Mutual Fund (assetmanagement.kotak.com) by 9:00 p.m. every business day.

The NAV will also be sent to at least 2 newspapers for publication on every business day. The newspapers publishing the NAV will have a nationwide circulation. The scheme’s monthly portfolio will also be available on the official website of Kotak Mahindra Mutual Fund on or before the 10th day of succeeding month.

Liquidity: Being an open-ended scheme, units can be redeemed/switched out at applicable NAVs on all business days.

Benchmark: Nifty Short Duration Index

Fund Manager

Mr. Deepak Agrawal and Mr. Arjun Khanna

The Kotak Bond Short Term Plan is managed by Mr. Deepak Agrawal and Mr. Arjun Khanna. Mr. Deepak Agrawal joined Kotak AMC in December 2002 but started managing investments only from November 2006. The other schemes managed by him include Kotak Savings Fund, Kotak Money Market Scheme, Kotak Dynamic Bond Fund, Kotak Low Duration Fund, Kotak Medium Term Plan, Kotak Banking & PSU Fund, etc.

Mr. Arjun Khanna has more than 11 years of experience in equity research and prior to this, he was associated with Principal Mutual Funds. Apart from the Kotak Bond Short Term Plan, he also manages the funds - Kotak Equity Savings Fund, Kotak Debt Hybrid, Kotak Bluechip Fund, Kotak Corporate Bond Fund, Kotak Dynamic Bond Fund, etc.

Investment Restrictions on the Kotak Bond Short Term Plan

As per the regulations laid down by the Securities and Exchange Board of India (SEBI), the below-given investment restrictions will apply to the subscription on the Kotak Bond Short Term plan:

• The scheme is not permitted to invest above 10% of its NAV in debt instruments that are unrated and issued by a single issuer. The total investment in such securities also cannot be more than 25% of the scheme’s NAV. Any such investments will need to be approved by the Board and Trustee of the AMC.
• The scheme is not allowed to invest above 10% of its NAV in debt securities issued by a single issuer and rated above the investment grade by a credit rating agency. This limit can be extended to 12% of the NAV provided that the Trust and Board of the AMC approve it.
• The scheme can invest the pending deployment of a scheme’s funds in short-term deposits of scheduled commercial banks without being charged any advisory or investment management fees.
• Debentures of any residual maturity period will attract the same restrictions as debt securities including the ones issued by public institutions/bodies such as municipal corporations, electricity boards, state transport corporations, etc. The restrictions, however, will not apply to securities issued by the central or state governments.
• The scheme is not permitted to invest in any Fund of Funds (FoFs) schemes.
• The scheme cannot advance loans for any purpose or borrow except to meet the scheme’s temporary liquidity needs. The borrowing, however, cannot exceed 6 months and should not be above 20% of the scheme’s net assets.
• The mutual fund can enter into transactions dealing with government securities only in the dematerialised form.
• The scheme shall not make any investments in any security issued through private placement, unlisted securities, and listed securities of group companies of the sponsors above 25% of the net assets.

Dividend Policy of Kotak Bond Short Term Plan

The scheme will declare dividends only if the distributable surplus is available and adequate. The dividend frequency will be as follows:

• Monthly Dividend (Reinvestment and Payout)
• Half-yearly Dividend (Reinvestment and Payout)
• Normal Dividend (Reinvestment and Payout)

If the actual amount of dividend payout is below Rs.500, the amount will compulsorily be invested back into the scheme. Only investors whose names appear on the register of unitholders will be eligible to receive dividends.

Other Facilities offered under Kotak Bond Short Term Plan

The below facilities are offered by the Kotak Bond Short Term Plan for the benefit of investors:

• Systematic Investment Plan (SIP)
• Systematic Withdrawal Plan (SWP)
• Switching
• Systematic Transfer Plan (STP)
• Dividend Transfer Plan (DTP)
• Trigger Facility
• Daily frequency under STP facility

Why you should invest in Kotak Bond Short Term Plan

• Professional management - Both the fund managers of the Kotak Bond Short Term Plan have many years of experience in handling investments. Therefore, you can rest assured that your investments will be handled efficiently to achieve optimal returns.
• Liquidity - Investors subscribing to the units of the Kotak Bond Short Term Plan can redeem and purchase units at applicable NAVs on every business day. Hence, offering liquidity to the investor.
• Multiple investment options - The Kotak Bond Short Term Plan comes in regular and direct plans wherein the direct plan will have a lower expense ratio than the regular plan. Also, investors can choose between growth and dividend option. The growth option will allow investors to enjoy capital gains at the end of the investment period while the dividend option will offer them a regular income.
• Low risk - Since the Kotak Bond Short Term Plan invests in debt and money market securities with a Macaulay Duration of the portfolio between 1 year and 3 years, the risk associated with it is quite low. Hence, it is ideal for investors who have a low appetite for risk and still want to grow their wealth over a medium investment horizon.
• Additional benefits - The Kotak Bond Short Term Plan offers special products such as Switching, Dividend Transfer Plan, etc. Under the switching facility, investors have an option to switch a part or the whole of their investments to another scheme of the same fund house. The dividend transfer plan on the other hand, allows investors to transfer their dividends to any other investment option under any other open-ended schemes of Kotak Mahindra Mutual Fund.

GST rate of 18% applicable for all financial services effective July 1, 2017.