Kotak Equity Arbitrage Fund - Growth
Kotak Mahindra Mutual Fund commenced operations in December 1998 and is managed by Kotak Mahindra Asset Management Company Limited (KMAMC). It has approximately 7.5 lakh investors across 80 cities in India and is a wholly-owned subsidiary of Kotak Mahindra Bank Limited. The asset management firm offers mutual fund schemes across equity, debt, hybrid, liquid, Fund of Funds (FoFs), and ETFs (Exchange-Traded Funds) categories.
The Kotak Equity Arbitrage Fund - Growth is an open-ended equity growth scheme that predominantly invests in arbitrage opportunities in the derivatives and cash segment of the equity market. The fund also invests a minor portion in debt and money market securities.
Investment Objective
To produce capital appreciation and income for the investor through investment in arbitrage opportunities in the equity market (cash and derivatives). The scheme will also allocate a small portion of the investments in money market and debt securities.
Key Features of the Scheme
The Kotak Equity Arbitrage Fund is ideal for investors who wish to receive income from arbitrage opportunities in the equity market while also growing their capital. The scheme displays the below-given features:
|
Type of fund |
An open-ended equity growth scheme |
|
Plans available |
Growth and Dividend |
|
Options under each plan |
The dividend option will have payout and reinvestment options |
|
Risk |
Moderately Low |
|
Systematic Investment Plan |
Available |
|
Systematic Transfer Plan |
Available |
|
Systematic Withdrawal Plan |
Available |
Investment amount for Kotak Equity Arbitrage Fund
|
Minimum Application Amount |
Rs.5,000 and in multiples of Re.0.01 for switches and Re.1 for purchases |
|
Minimum Additional Investment |
Rs.1,000 and in multiples of Re.1 for purchases and Re.0.01 for switches |
|
Minimum installment for Systematic Investment Plan (SIP) |
Rs.500 (minimum 10 SIP instalments of Rs.500 each) |
|
Minimum installment for Systematic Withdrawal Plan (SWP) |
Rs.1,000 (minimum 6 instalments/entire appreciation) |
|
Entry Load |
Not Applicable |
|
Exit Load |
0.25% exit load will apply if an investor redeems/switches units before 30 days from unit allotment date. No exit load will be charged thereafter. |
Asset Allocation for Kotak Equity Arbitrage Fund
|
Investments |
Indicative Allocation |
Risk Profile |
|
Equity and its related instruments (including derivatives) |
65% to 90% |
Low to Medium |
|
Debt and money market securities (including margin money deployed in transactions involving derivatives) |
10% to 35% |
Low |
Who can invest in Kotak Equity Arbitrage Fund?
The below-mentioned persons/entities can subscribe to the units of Kotak Equity Arbitrage Fund:
- 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
- Body of Individuals (BOIs) or Association of Persons (AOPs)
- Hindu Undivided Families
- SEBI registered mutual funds
- Statutory/Public corporations and Public Sector Undertakings (PSUs)
- Government of India approved International Multilateral Agencies
- Foreign Institutional Investors or SEBI registered sub-accounts of FIIs
- Charitable or religious trusts and trustees of private trusts
- Regional rural banks, Co-operative banks, and other banks
- Investment Institutions and Financial Institutions
- Foreign Portfolio Investors
- Navy/Army/Air Force, paramilitary units and other eligible institutions
- Scientific and Industrial Research Organisations
- Public Financial Institutions as defined under the Companies Act 2013
- 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
- Educational institutions and universities
- Other schemes of Kotak Mahindra Mutual Fund
NAV Disclosure and Benchmark for Kotak Equity Arbitrage Fund
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 3 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 50 Arbitrage Index
Fund Manager
Mr. Deepak Gupta
The Kotak Equity Arbitrage Fund is managed by Mr. Deepak Gupta who has been managing it since 24 February 2011. Mr. Gupta has around 13 years of experience in handling mutual fund investments. The other funds managed by him include Kotak Asset Allocator Fund, Kotak World Gold Fund, Kotak Equity Savings Fund, Kotak Banking ETF, Kotak Nifty ETF, Kotak Sensex ETF, and Kotak NV 20 ETF.
Investment Restrictions on Kotak Equity Arbitrage Fund
Subscription to the units of Kotak Equity Arbitrage Fund will follow the below-given investment restrictions as laid down by the Securities and Exchange Board of India (SEBI):
- 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.
- The scheme is not allowed 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.
- 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 cannot 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 is not permitted to 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 scheme is not allowed to invest in any Fund of Funds (FoFs) schemes.
- 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 Equity Arbitrage Fund
The scheme will declare dividends only if the distributable surplus is available and adequate. The dividend frequency will be as follows:
- Fortnightly
- Monthly
- Bimonthly
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 Equity Arbitrage Fund
The Kotak Equity Arbitrage Fund offers the below facilities for the benefit of its investors:
- Systematic Investment Plan (SIP)
- Systematic Transfer Plan
- SIP Booster Facility
- Systematic Withdrawal Plan
- Flex-Systematic Investment Plan (FSIP) Facility
- Dividend Transfer Plan (DTP)
- Flex-Systematic Transfer Plan (FSTP) Facility
- Daily Frequency under Systematic Transfer Plan Facility
- Switching
Why you should invest in Kotak Equity Arbitrage Fund
- Low risk - Since the Kotak Equity Arbitrage Fund invests in arbitrage opportunities in the equity market, the risk associated with it is comparatively low. Hence, it is ideal for investors who have low risk appetite but still want to grow their investments.
- Can invest small - With an investment of just Rs.500 a month through an SIP and Rs.5,000 in lump sum, investors have an opportunity to create wealth over a long term. Therefore, investors need not worry about having a huge sum to invest in mutual funds.
- Professional management - The fund manager of the scheme, Mr. Deepak Gupta has many years of experience in managing mutual fund investments. Hence, you can rest assured that your investments will be handled efficiently to achieve the most favourable returns.
- Extra benefits - The Kotak Equity Arbitrage Fund comes with additional benefits like SIP Booster Facility, Systematic Withdrawal Plan, Flex-Systematic Investment Plan (FSIP) Facility, Dividend Transfer Plan (DTP), Switching facility, etc. All these added benefits make the scheme even more attractive.
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