Kotak Equity Arbitrage Fund is an open-ended scheme that invests in arbitrage opportunities and aims to generate returns in the form of income and capital growth. Investments under this scheme are made in the cash and derivatives segment of the equity market as well as in debt and money market securities.
Investment Objective of Kotak Equity Arbitrage Fund
Kotak Equity Arbitrage Fund aims at generating income along with capital appreciation through investment mainly in arbitrage opportunities in the cash as well as derivatives segment of the equity market, and partly in money market and debt securities.
Key Features of Kotak Equity Arbitrage Fund
Here are some of the key features of Kotak Equity Arbitrage Fund:
|Type of Fund||Open-ended scheme that invests in arbitrage opportunities|
|Plans Available||Regular Plan and Direct Plan|
|Options Under Each Plan||Growth and dividend (reinvestment and payout)|
|Systematic Investment Plan||Available|
|Systematic Transfer Plan||Available|
|Systematic Withdrawal Plan||Available|
Investment Amount for Kotak Equity Arbitrage Fund
|Minimum Application Amount (for Growth option)||Rs.5,000 (plus in multiples of Re.1)|
|Minimum Additional Investment (for Growth option)||Rs.1,000 (plus in multiples of Re.1)|
|Minimum Instalment for Systematic Investment Plans||Rs.500|
|Minimum Instalment for Systematic Withdrawal Plan||Rs.1,000|
Asset Allocation for Kotak Equity Arbitrage Fund
|Instruments||Allocations (Percentage of total assets)||Risk Profile|
|Equity and equity-related securities including derivatives||65% to 90%||Low to medium|
|Money market and debt securities including margin money that is used in derivatives transactions||10% to 35%||Low|
Who can Invest in Kotak Equity Arbitrage Fund?
- Indian residents who above the age of 18 years
- Minors via parents or legal guardians
- Hindu Undivided Families (HUFs)
- Partnership firms through a partner
- Non-resident Indians (NRIs) or Persons of Indian Origin (PIOs)
- Investment institutions, financial institutions, and banks (regional rural banks as well as co-operative banks)
- Statutory or public corporations and public sector undertakings
- Corporate bodies and companies that have been registered within the country
- Charitable and Religious Trusts
- Body of Individuals (BOIs) and Association of Persons (AOPs)
- Societies and co-operative societies that are registered in India
- Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs)
- Navy, Air Force, Army, and other paramilitary units
- Educational institutions and universities
- Other mutual funds that are registered with the Securities and Exchange Board of India
- Industrial and scientific research organisations
- International multilateral agencies that have the approval of the Government of India
- Gratuity or Pension or Provident Fund
- Trustees of private trusts that have the authority to make investments in mutual fund schemes
NAV Disclosure and Benchmark for Kotak Equity Arbitrage Fund
The Net Asset Value of the scheme is required to be updated by the Asset Management Company on a regular basis by 9.00 p.m. on the website of the Association of Mutual Funds in India. The Net Asset Values are also expected to be updated on the fund house’s website on a daily basis. In case there are any delays in updating the Net Asset Value of the scheme, the fund house will have to explain the reason in writing to the Association of Mutual Funds in India.
The following formula is used for the calculation of the Net Asset Value of a scheme:
(Fair or market value of the investments made by the scheme + Current assets of the fund - current liabilities) / Number of outstanding shares
Benchmark Index of Kotak Equity Arbitrage Fund: Nifty 50 Arbitrage Index
Kotak Equity Arbitrage Fund Fund Manager
Kotak Equity Arbitrage Fund is managed by Mr. Deepak Gupta. He is a certified chartered accountant and a cost accountant with more than 13 years of experience in the mutual fund sector as well as 11 years of experience in fund management-related areas. He manages a number of other schemes for Kotak apart from the Equity Arbitrage Fund.
Investment Restrictions of Kotak Equity Arbitrage Fund
The following are the investment restriction of Kotak Equity Arbitrage Fund:
- The scheme is not allowed to make investments over 10% of its Net Asset Value in equity and equity-related securities of any particular company.
- The scheme is not allowed to make investments over 5% of its Net Asset Value in unlisted equity or equity-related securities.
- The scheme is not allowed to own over 10% of the paid up capital carrying voting rights of any company.
- The scheme is not allowed to invest over 10% of its Net Asset Value in debt securities that consist of money market securities issued by a single issuer that are rated not under investment grade by a credit rating agency.
- The scheme is not allowed to make investments over 10% of its Net Asset Value in unrated debt securities issued by a single issuer and the overall investment in these securities cannot be more than 25% of the Net Asset Value of the fund.
- The scheme is not allowed to make investments in any fund of funds scheme.
Dividend Policy of Kotak Equity Arbitrage Fund
The declaration of dividends depends upon the availability and sufficiency of distributable surplus. The company can declare dividends either on a fortnightly basis, a monthly basis, or a bimonthly basis.
Other Facilities Offered by Kotak Equity Arbitrage Fund
The following are some of the key facilities offered by Kotak Equity Arbitrage Fund:
- SIP Booster Facility: This facility offers investors with the option to raise the SIP amount. Investors can increase the instalment amount by a fixed sum at pre-defined intervals, thereby getting increased flexibility. The frequency at which the amount can be increased is semi-annual and annual.
- Flex – STP Facility: This facility allows investors to transfer variable amount on pre-determined dates to the Growth option of open-ended equity funds depending upon the price to equity (PE) level of Nifty. This facility is available under the quarterly, monthly, and weekly options.
- Dividend Transfer Plan: This facility allows investors under the dividend option of the plans to transfer their dividends to other options.
- Switching: This facility allows unitholders to switch out either a part or all of their units in the scheme to any other option or to any other scheme.
Why you should invest in Kotak Equity Arbitrage Fund
Kotak Equity Arbitrage Fund is a great investment option if you wish to derive income from arbitrage opportunities in the equity market. The risk factor associated with the fund is moderately low, which increases the chances of generating healthy returns. Moreover, Kotak has developed a strong reputation in the market because it employs some experienced and truly expert fund managers who are sure to help you create wealth over a period of time.
GST rate of 18% applicable for all financial services effective July 1, 2017.