The first of its kind, single asset class multi manager fund in the domestic mutual fund industry, this scheme would invest in top recommended schemes, across the plethora of equity diversified schemes available.
The portfolio of the scheme would comprise both large capital and aggressive diversified equity schemes of various Indian mutual funds.
Key to its portfolio management process is the role of a designated agency (currently Kotak Securities) that will periodically provide independent, recommendations about equity schemes, based on research conducted through their clearly defined research methodology.
Kotak Securities will analyse a universe of diversified equity schemes (selected for their track record, corpus etc) on the basis of their performance, and provide KMMF with a list of recommendations, for both diversified large-cap and diversified aggressive equity schemes.
Each quarter, Kotak Equity FOFs portfolio will be reviewed, and rebalanced, if necessary, to include the top ranked schemes from this list of recommendations.
Speaking on the occasion of the launch of its FOF, Ajay Bagga, CEO, KMMF said: We have chalked out a few criterion for selection of schemes from various fund houses for investment purpose. Few of the pre-requisites are the fund house should not have less than Rs 5000 crore as assets under management (AUM).
The equity AUM of the fund should not be less than Rs 500 crore. The fund house will not charge any load to the investors as we would already charge an all rounded load of 2.25 per cent at KMMF.
This is just the primary stage of an equity FOF in India. Based on the performance of the same, we have at least three product ideas that we plan to launch going ahead from here. Mr Bagga further informed.
The initial public offer (IPO) for the Kotak Equity FOF would remain open for subscription from July one till July 19, 2004.