Kotak Mahindra Mutual Fund announced the launch of the Kotak Technology Fund, an open-ended equity scheme investing in technology and technology-related sectors.
The scheme opened for public subscription on February 12, 2024, and will close on February 26, 2024. 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 fund scheme investing in technology and technology-related sectors. This product is suitable for investors seeking:
-Long-term capital growth
– Investment in a portfolio of predominantly equity and equity-related securities of technology and technology-related 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 technology and technology-related sectors. However, there is no assurance that the objective of the scheme will be achieved.
Nilesh Shah, Managing Director, KMAMC, said, “Investing in technology is no longer a choice, but a way to stay ahead in the rapidly evolving global landscape. Technology plays a pivotal role in driving the India growth story forward. The Kotak Technology Fund aligns with the increasing importance of the technology sector & provides the investors an avenue to participate in its growth potential.”
How may one invest in this scheme?
Investors can invest under the scheme with a minimum investment of ₹100 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:
Indicative allocations (% of total assets)
Equity and equity-related instruments of technology and technology-related companies
Equity and equity-related instruments of companies other than the above
Units of REITs and InvITs
Debt securities, money market instruments, and fixed-income derivatives
Low to Moderate
Are there similar mutual funds in the market?
To date, many asset management companies (AMCs) have launched such technology-themed funds, thus, allowing inclined investors to avail of returns corresponding to the total returns of the securities in this particular index. Some of these include:
Mutual Fund House
Name of the Scheme
Franklin Templeton India Mutual Fund
Franklin India Technology Fund
SBI Mutual Fund
SBI Technology Opportunities Fund
ICICI Prudential Mutual Fund
ICICI Prudential Technology Fund
Quant Mutual Fund
Quant Teck Fund
|Source: AMFI (As of February 12, 2024)
How will the scheme benchmark its performance?
The performance of the scheme is measured against the S&P BSE Teck Index (Total Return Index). The S&P BSE Teck index comprises constituents of the S&P BSE 500 that are classified as members of the media and publishing, information technology, and telecommunications sectors as defined by the BSE industry classification system. 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 / 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 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.
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