Kotak Mutual Fund Files Draft For Nifty Alpha 50 Index Fund

Kotak Mahindra Mutual Fund has submitted a draft for the Kotak Nifty Alpha 50 Index Fund. This is an open-ended index fund that will replicate the Nifty Alpha 50 Index. The scheme aims to generate returns corresponding to the index’s performance, subject to tracking errors​.

Investment Allocation

The fund’s portfolio will consist of 95-100% equity investments in stocks that form part of the Nifty Alpha 50 Index. The remaining 0-5% can be allocated to debt or money market instruments. The fund may also use derivatives for short durations if needed​.

Nifty Alpha 50 Index 

The Nifty Alpha 50 Index consists of 50 stocks, selected based on their alpha values, which measure excess returns over the market. The index is reviewed quarterly using stock data from February, May, August, and November. The stocks with the highest alpha values are given greater weight​.

The fund will benchmark its performance against the Nifty Alpha 50 Index (Total Return Index – TRI). Since it follows a passive investment strategy, it is subject to tracking errors, which may arise due to cash holdings, redemption pressures, and transaction costs​.

Fund Managers

The scheme will be managed by Devender Singhal and Satish Dondapati, while Abhishek Bisen will handle debt investments. Singhal has over 22 years of experience in equity research and fund management, while Dondapati specializes in ETFs and index funds​.

Minimum Investment and Redemption

• Minimum purchase: ₹100 and in multiples thereafter.
• Minimum additional investment: ₹100.
• Minimum redemption: ₹100 or account balance, whichever is lower​.

The scheme allows daily buying and selling of units based on Net Asset Value (NAV). NAV will be published daily on the Kotak Mahindra Mutual Fund and AMFI websites​.

Fund Expenses and Exit Load

The total expense ratio (TER) will be capped at 1% of daily net assets, covering management fees, marketing expenses, and other costs. The fund has no exit load, meaning investors can redeem units without incurring additional charges​.

The Kotak Nifty Alpha 50 Index Fund is designed for investors looking to track a high-alpha index without active management. It provides exposure to stocks with good historical performance while maintaining a rule-based approach.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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