Kotak MF launches Medium Term Fund

An open ended debt scheme with an aim to generate regular income with capital appreciation

February 25, 2014 4:24 IST | India Infoline News Service
Kotak Mutual Fund, one of the leading mutual fund houses in India, is launching a new fund called – The Kotak Medium Term Fund. The New Fund Offer period will be from 28th February, 2014 to 13th March, 2014. It is an open ended debt scheme which seeks to generate regular income and capital appreciation by investing in a portfolio of medium term debt and money market instruments. The fund will optimize returns by keeping its portfolio weighted average maturity between 3 and 7 years.
Kotak Medium Term Fund is suitable for conservative investors who seek regular income over a medium term horizon and want to benefit from potential easing of inflation over medium to long term. This scheme aims to achieve better tax efficiency than conventional deposits.
This scheme focuses on accrual approach which invests in debt and money market instruments at the current high yield levels to accumulate the yields in the portfolio. In addition to high accrual, the portfolio will have the potential to benefit from capital gains if interest rates ease in the future.
Speaking about the launch Ms. Lakshmi Iyer, Chief Investment Officer (Debt) and Head Products said,“We believe that inflationary pressures coming off in future could mean RBI easing liquidity and maintaining status quo on rates. This could result in easing of yields translating into potential mark-to-market gains in fixed income portfolios such as the Kotak Medium Term Fund. Hence a conservative investor with a 2 years horizon could look at investing in the product”
The minimum application amount (during NFO) is Rs.5,000/-. The scheme has growth option, quarterly dividend and annual dividend. It is benchmarked against CRISIL Composite Bond Fund Index.

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