Kotak Mahindra AMC launches BSE Sensex Index Fund; check key details

Kotak BSE Sensex Index Fund NFO; here is all you need to know about this open-ended scheme that follows a passive investment strategy replicating or tracking the BSE Sensex Index

Kotak Mahindra Asset Management Company has announced the launch of the Kotak BSE Sensex Index Fund, an open-ended scheme replicating or tracking the BSE Sensex Index. The new fund offer (NFO) opened today, January 27, 2025, and will close on February 10, 2025. 

 

This is an open-ended scheme that follows a passive investment strategy replicating or tracking the BSE Sensex Index. And, to achieve the investment objective, the scheme will follow a passive investment strategy with investments in stocks in the same proportion as in the BSE Sensex Index. 

 

“The investment strategy would revolve around reducing the tracking error through rebalancing of the portfolio, taking into account the change in weights of stocks in the index as well as the incremental collections/redemptions from the scheme. Such rebalancing shall be done in accordance with timelines prescribed by SEBI from time to time," according to the Scheme Information Document (SID). 

 

The fund offers investors an opportunity to invest in the top 30 large-cap companies by tracking the BSE Sensex Index. However, the fund carries a very high-risk profile, which aligns with its benchmark that also has a very high risk. Satish Dondapati and Abhishek Bisen serve as the fund managers for the Kotak BSE Sensex Index Fund.  

Nilesh Shah, managing director of KMAMC, said, "This index fund offers investors an opportunity to invest in the top 30 companies representing India’s large and established businesses. The BSE Sensex Index provides investors with exposure to a diversified portfolio of blue-chip companies across sectors.” 

Devender Singhal, executive vice president and fund manager at KMAMC, , “Historically, the BSE Sensex Index has been regarded as a barometer of India’s economic growth. Investing in the BSE Sensex Index provides exposure to the top 30 blue-chip companies across diverse sectors, aiming to offer long-term growth potential. Investors seeking a core portfolio allocation with a long-term perspective can consider this index fund.”

 

As per the SID, units issued on reinvestment of IDCWs shall not be subject to any entry or exit load.  "The AMC reserves the right to change or modify the load structure of the scheme, subject to maximum limits as prescribed under the SEBI (MF) Regulations and circulars issued thereunder from time to time," reads the SID.

  The minimum redemption amount for all plans, as outlined in the SID, will be Rs 100 or account balance, whichever is lower. For switching out, the minimum switch amount for all plans will be Rs 100. 

 

Kotak BSE Sensex Index Fund: Should you invest?

The Kotak BSE Sensex Index Fund, as outlined in the SID, is suitable for investors seeking long-term wealth creation with high risk involved. "Return that corresponds to the performance of BSE Sensex Index, subject to tracking error."