Kotak MF filed a draft document with SEBI to launch Target Maturity Fund
Kotak Mutual Fund has filed a draft proposal with SEBI for the introduction of a new target maturity fund called Kotak CRISIL-IBX AAA Financial Services Index – Dec 2026 Fund. This is an open-ended debt index fund with moderate interest rate risk and relatively low credit risk. The plan is to invest in securities covered under the CRISIL-IBX AAA Financial Services Index – Dec 2026.
Objective and Benchmark
The fund aims to generate returns aligned with the performance of the CRISIL-IBX AAA Financial Services Index – Dec 2026, net of fees and expenses. This index tracks the performance of AAA-rated issuers from the financial services sector with bonds maturing near the target date of December 2026. The fund will be benchmarked against the same index, ensuring alignment with its objective.
Management and Structure
The portfolio will be managed by an experienced portfolio manager using a passive investment approach to replicate the performance of the CRISIL-IBX AAA Financial Services Index – Dec 2026. It will have a buy-and-hold approach where most of the investment will be made in corporate bonds that will be held until maturity, except in rebalancing and meeting redemption demands.
Plans and Options
There would be two plans of this fund- Regular and Direct plan with growth as well as IDCW (Income Distribution cum Capital Withdrawal) facility available for both of them.
The fund structure has an exit load that would not be charged. The minimum amount that needs to be invested is Rs.100, while the upper limit is unlimited. It gives flexibility to investors. The TER will be 1% at max. This is as per regulatory guidelines.
Asset Allocation
The following will be the investment by the fund:
- 95-100% in securities covered by the CRISIL-IBX AAA Financial Services Index – Dec 2026.
- 0-5% in cash and other debt or money market instruments.
Investor Suitability
This fund will be appropriate for investors looking for over a target maturity period and seeking a passively managed fund tracking the CRISIL-IBX AAA Financial Services Index- Dec 2026. These are moderate-risk funds because of the scheme’s riskometer.
The proposed Kotak CRISIL-IBX AAA Financial Services Index – Dec 2026 Fund offers a disciplined and transparent investment approach. By focusing on AAA-rated financial services bonds and adhering to a defined maturity period, it presents an appealing option for income-oriented investors aiming to minimize risk while achieving steady returns.
