The mutual fund has also lined up an old economy scheme, namely K Oldeco. Both these schemes are open-end equity growth schemes.

The fund has filed the offer document with the Securities Exchange Board of India (Sebi). The date of launch of these schemes is yet to be finalised as KMMF is awaiting Sebi clearance, according to a source in Kotak Mahindra Mutual Fund.

K Media is designed to exploit growing opportunities in media sector, according to a fund analyst. The media companies like Zee Telefilms, Sri Adhikari Brothers and TV18 enjoy very high valuations on the bourses.

Nevertheless, a number of media companies have also lined up initial public offers and some have tapped the public successfully. Cinevista, Mukta Arts and Padmalaya Telefilms have been listed on the bourses.

However, compared to information technology, the media sector does not have much depth. Says Value Research CEO Dhirendra Kumar, ``These kind of products are very dangerous in nature and investors will be exposed to high volatility. This will remain a niche product and one should not expect so many such schemes in future.'' The moment investors have a bitter experience of investing in such high volatile scheme, the novelty of the product is lost, he adds.

Both these schemes, with a face value of Rs 10, will be offered at par. As the name suggests, the media scheme will invest in media and entertainment and old economy scheme will have a diversified portfolio of traditional sector stocks.

K Media and K OldEco have both the options of growth and dividend. Both the schemes have an entry load of 1.75 per cent and have no exit load. The minimum amount of investment is Rs 5,000 and in multiples of Rs 1000 thereafter.

K Media will be investing predominantly in equity and equity related securities of media and entertainment sector. K Media's performance is currently benchmarked against Sensex and S&P CNX Nifty. However, according to the offer document, ``The scheme will be benchmarked against a media sector index when such an index becomes available in the future.'' The fund will use derivatives to hedge risks and it may also invest in GDR/ADR of Indian companies. K Media has identified four areas of investments in media, namely radio, television, cinema and publications.

The fund will also invest in companies involved in the production of software for various forms of delivery of media. Also, the fund will look at broadband companies which offer services like telephony, internet and video through a single medium. The scheme will invest in listed and unlisted companies and rated and non-rated debt or money market securities. The fund will have 90 per cent exposure to equity and 10 per cent to debt.

The objective of K Oldeco is to generate growth by investing in traditional sectors. The sectors include cement, metals, chemicals, petroleum, fertilizers, paper, transportation, passenger and commercial vehicles, pharmaceutical, fast moving consumer goods, etc. The scheme may invest 90 per cent of its corpus in equity and 10 per cent in debt.