Kotak Mahindra AMC launches India's first Kotak MSCI India ETF; details

Kotak MSCI India ETF: Here are the key features that investors need to know about this open-ended scheme, which is measured against the MSCI India Index

Kotak Mahindra Asset Management Company has introduced the Kotak MSCI India ETF, the country's first exchange-traded fund (ETF) designed to track the MSCI India Index.  This open-ended scheme opens for public subscription today, January 29, with its new fund offering (NFO) closing on February 12, 2025. The scheme is scheduled to reopen for continuous trading on or before February 27, 2025. 

Kotak MSCI India ETF is measured against the MSCI India Index (Total Return Index (TRI)). The risk of the scheme, as well as the benchmark, is very high, suggests the Scheme Information Document (SID).  Moreover, to cater to international investors, Kotak International, the global business arm of the Kotak Group, has launched a separate fund—Kotak MSCI India ETF Fund, which will invest in the same benchmark.

 

Nilesh Shah, managing director, KMAMC, said, “Kotak Mutual Fund is making history as the first company in India to partner with MSCI to launch the Kotak MSCI India ETF. This isn't just another fund – it's your gateway to capturing India's economic growth through a carefully curated selection of large- and mid-cap companies shaping the nation's future. The launch of this ETF reflects our dedication to providing products that suit varying risk appetites and investment horizons.

 

“The Kotak MSCI India ETF could be an ideal choice for investors, both global and domestic, who believe in India's enduring potential and are ready to be part of its remarkable journey. This fund is suitable for investors with a long-term view,” Shah added.  

The investment objective of the scheme is to replicate the composition of the MSCI India Index and to generate returns that are

commensurate with the performance of the MSCI India Index. And, to achieve this, the scheme will follow a passive investment strategy with investments in stocks in the same proportion as in the MSCI India 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," reads the SID.

 

Devender Singhal and Abhishek Bisen are the fund managers of the Kotak MSCI India ETF.

 

The minimum application amount during the NFO remains Rs 5,000, with any amount thereafter. Investors are required to pay Rs 10 per unit to invest during the NFO. All investors, including market makers, large investors, and others, may sell their units on the stock exchanges where these units are listed on all trading days.   Kotak Mutual Fund, in the SID, said that no entry load will be charged on purchase, additional purchase, or switch-in. Meanwhile, the exit load also remains nil for the scheme.

 

The ETF, as outlined in the SID, is suitable for investors seeking long-term capital appreciation, as well as those seeking investment in stocks comprising the MSCI India Index. The ETF endeavours to track the benchmark index, subject to tracking errors.