Investment Objective:

The investment objective of the scheme is to replicate the composition of the NIFTY IT Index, and generate returns that are commensurate with the performance of the NIFTY IT Index, subject to tracking errors

Investment Strategy:

The scheme will follow passive investment strategy with investments in stocks in the same proportion as in NIFTY IT Index to achieve the investment objective. The investment strategy would revolve around reducing the tracking error to the least possible by rebalancing the portfolio, considering the change in weights of stocks in the Index and the incremental collections/redemptions from the scheme.

Risk mitigation measures for portfolio volatility and portfolio concentration
ETF Scheme being a passive investment carries lesser risk than active fund management. The portfolio follows the Index. Therefore, the stock concentration level in the portfolio and its volatility would be the same as that of the Index, subject to tracking error. Thus there is no additional element of volatility or stock concentration on account of fund manager decisions.

Risk mitigation measures for managing liquidity
As per NSE data, more than half of market liquidity remains in the Index. Therefore, the scheme does not envisage liquidity issues. The scheme may take exposure to equity derivatives of the Index itself or its constituent stocks when equity shares are unavailable, insufficient or for rebalancing in case of corporate actions for a temporary period.


Why Nifty IT Index

Benefits of Kotak IT ETF

  • Lower cost: ETFs generally offer lower expense ratios than actively managed mutual funds schemes.

  • Liquidity: Apart from being readily available for trade on the recognized stock exchanges, ETF units can also be bought in creation units by large investors directly from the asset management company.

  • Less of Ambiguity: The ETF’s investment strategy & stock selection are clearly defined, holding stocks based on the Underlying Index in the same weightage.

  • Transparency: The index constituents are available in the public domain daily by NSE.

  • Diversification: Fund holds a basket of securities corresponding to the Underlying Index.

  • Passive fund management: The fund manager ensures that the portfolio resembles the benchmark index with minimal tracking error.

Fund Features

Name of the Scheme:

Kotak IT ETF

Type of scheme:

An open-ended scheme replicating/ tracking NIFTY IT Index

Investment Objective:

The investment objective of the scheme is to replicate the composition of the NIFTY IT Index and to generate returns that are commensurate with the performance of the NIFTY IT Index, subject to tracking errors.

Benchmark:

NIFTY IT Index TRI

Fund Manager(s):

Mr Devendra Singhal and Mr. Satish Dondapati

Fund Manager(s):

Mr Devendra Singhal and Mr. Satish Dondapati

Minimum amount for purchase / redemption / switches (Direct Plan & Regular Plan)

Minimum Investment Size:

Initial Purchase:

Rs.5000/- and in multiple of Re.1 thereafter.
In case of investors opting to switch into the scheme from existing Schemes/Plans/Options of the Fund during the NFO period, the minimum amount is Rs. 5,000/- (Please note investor’s Demat account details should be clearly mentioned on switch request and CML copy should be attach with transaction)

Face Value of Units:

The face value of each unit will be Rs.10 per unit. On allotment value of each unit will be approximately equal to 1/1000th of the value of Nifty IT Index.

Load Structure:

Entry Load: Nil

Exit Load: Nil

Liquidity:

The Units of the Scheme can be purchased/ redeemed on a continuous basis on the Stock Exchanges during the trading hours like any other publicly listed security.

Risk Factors

Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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