Kotak Mutual To Launch Us Treasury Scheme

Kotak Mahindra Mutual Fund will launch a $14 million US Treasury scheme shortly which will primarily invest in US treasury bonds.

The mutual fund has already submitted the proposal to the Securities and Exchange Board of India. This is the second fund after Sun F&C to have finalised the plan to leverage the permission given in the last budget to invest in AAA- rated securities abroad. KMFL is also expecting its assets under management to reach Rs 2,000 crore by the end of June.

"We are qualified to invest in overseas securities to the tune of Rs 70 crore and we will be basically leveraging on the rupee-dollar rate and about 3-3.5 per cent interest rate given on US treasury securities," Prakash Dalal, chief marketing officer, Kotak Mahindra Asset Management Company, said.

KMFL is also considering launching monthly income plans (MIP) with floating rates. KMFL is also planning a couple of fixed maturity plans (FMPs) in the near future.

In last one month KMFL raised Rs 42 crore through 2 FMP's of 370 days each. "The trend is more in favour of liquid short term instruments. Hence if we find an ongoing demand we will launch few more FMPs," Dalal said.

KMFL will be focussing on increasing the assets under management (AUM) and to achieve that it will come out with various investor friendly tailor made products in next few months. "We have adopted a three pronged approach to increase our AUM. The first includes the products, communication and facilitation while the second focus area would be investor relations and the third we will be concentrating on is distribution channel," Dalal said.

Kotak Mahindra Asset Management Company Limited (KMAMC), is a wholly owned subsidiary of KMFL, is the asset manager for Kotak Mahindra Mutual Fund (KMMF).

KMAMC started operations in December 1998 and has over 1,15,000 investors in various schemes. KMMF offers schemes catering to investors with varying risk- return profiles and was the first fund house in the country to launch a dedicated gilt scheme investing only in government securities.