Kotak Nifty Top 10 Equal Weight Index Fund Draft Filed

Kotak Mahindra Mutual Fund has filed a draft for the Kotak Nifty Top 10 Equal Weight Index Fund, an open-ended index scheme that aims to replicate the Nifty Top 10 Equal Weight Index. The fund will invest in 10 stocks selected from the Nifty 50, ensuring equal allocation among them.

Investment Strategy

The fund seeks to provide returns that correspond to the total returns of the underlying index, subject to tracking error. It will follow a passive investment strategy, investing in the same stocks and weightage as the Nifty Top 10 Equal Weight Index. The portfolio will be rebalanced quarterly based on changes in the index composition​.

The scheme will be managed by Devender Singhal and Satish Dondapati, with Abhishek Bisen handling the debt securities allocation​.

Benchmark and Risk Factors

The scheme will be benchmarked against the Nifty Top 10 Equal Weight Index (Total Return Index – TRI). Risks include tracking errors, market volatility, and potential liquidity concerns, particularly during rebalancing periods​.

Fund Composition

Nifty Top 10 Equal Weight Index aims to track the performance of the top 10  stocks selected based on 6-month average free-float market capitalisation from the Nifty 50. Some of them are

• Reliance Industries – 10.53%
• Kotak Mahindra Bank – 10.42%
• Bharti Airtel – 10.31%
• ICICI Bank – 10.18%
• Infosys – 9.98%​.

Liquidity and Investment Details

The fund will be available for subscription and redemption on all business days at NAV-based prices. Units will be issued at ₹10 per unit during the New Fund Offer (NFO). The minimum investment required is ₹100, with subsequent investments allowed in multiples of ₹100​.

Conclusion 

The fund will have no exit load. The Total Expense Ratio (TER) is capped at 1%, as per SEBI regulations​. This filing is currently under review, and details are subject to regulatory approvals.

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 in the securities market are subject to market risks, read all the related documents carefully before investing.