Kotak MF to launch 2 new plans this year; eyes 5% market share

Mutual fund house Kotak Mahindra Asset Management Company has said it will launch two new open-ended funds this year to fill some gaps in its product portfolio.

“The proposed new funds, Kotak Dynamic Equity Fund (KDEF) and Kotak Arbitrage Plus Fund (KAPF), are awaiting statutory approval,” said Nilesh Shah, Managing Director of the company.

“We have no dynamic equity fund in our portfolio now. So the new KDEF will have a conservative risk-return profileand can take a call to invest between debt and equity,” he said.

“In the KAPF scheme, risk will be little higher and the returns too, will be higher. We run India’s largest arbitrage fund. But it is only cash and futures arbitrage scheme. This has been well accepted in the market. Now there are other opportunities on the derivatives side which could be buying entire index and selling individual stocks or reverse. KAPF will help tap newer opportunities,” he added.

Shah said the company was also planning a couple of new close-ended schemes — Fixed Maturity Plan and Capital Protection Plan — during this year.

The company’s immediate term plan is to increase its market share to 5 per cent by the end of this fiscal from 3.5 per cent now in the mutual fund industry supported by deeper penetration and strong investor education programmes.

Shah pointed out that strong focus on systematic investment plans (SIPs) coupled with investor education programmes by all mutual fund players, including Kotak helped attract first-time investors into the MF market. “We have been seeing traction in non-metro locations in recent months. We have also simplified our product portfolio to take advantage of this growing potential,” he added.

For Kotak, in the past 15 months, the SIP book size has grown four-fold to ₹60 crore from ₹15 crore. “Overall, about ₹2,800 crore is invested every month in SIP equity mutual fund schemes,” he said.

Kotak Mahindra AMC claims eighth position in the MF market and its assets under management have grown to about ₹62,000 crore from ₹38,000 crore a year ago.