The new fund offer, which will be open for subscription from February 28, will close on March 13, 2014, a company release said.
The new scheme is an open ended debt scheme which seeks to generate regular income and capital appreciation by investing in medium-term debt and money market instruments, it said.
"We believe that inflationary pressures coming off in future could mean RBI easing liquidity and maintaining status quo on rates. This could result in easing of yields translating into potential mark-to-market gains in fixed income portfolios such as the Kotak Medium Term Fund.
"Hence a conservative investor with a 2 years horizon could look at investing in the product," Chief Investment Officer (Debt) and Head Products of Kotak Mutual Fund, Lakshmi Iyer said.