Kotak Mutual Fund launches Kotak Multi Asset Allocation Fund

Kotak Mutual Fund has launched Kotak Multi Asset Allocation Fund, an open-ended scheme investing in equity, debt and money market instruments, commodity ETFs and exchange traded commodity derivatives.

The new fund offer or NFO of the scheme is open for subscription, and it will close on September 24.

The investment objective of the scheme is to generate long term capital appreciation by investing in equity and equity-related securities, debt and money market instruments, commodity ETFs and exchange traded commodity derivatives.


The performance of the scheme will be benchmarked against NIFTY 500 TRI (65%) + NIFTY Short Duration Debt Index (25%) + Domestic Price of Gold (5%) + Domestic Price of Silver (5%). The scheme will be managed by Devender Singhal, Abhishek Bisen (debt investment), Hiten Shah (arbitrage investment), Jeetu Valechha Sonar (commodities investment), and Arjun Khanna (foreign securities).

The minimum investment amount is of Rs 5,000 and in multiples of Re 1 for purchases and of Re 0.01 for switches. The minimum investment amount for SIP is Rs 500 (subject to a minimum of 10 SIP instalments of Rs 500 each).

The scheme will invest 65-80% in equity and equity related instruments, 10-25% in debt and money market securities, 10-25% in commodity ETFs, exchange traded commodity derivatives (ETCDs) & any other mode of investment in commodities as permitted by SEBI from time to time, 0-15% in overseas mutual funds schemes/ ETFs/foreign securities, and 0-10% in units of REITs & InvITs. The scheme will offer both regular and direct plans with growth and IDCW options.

Kotak Multi Asset Allocation Fund offers tax efficiency on account of equity taxation along with higher risk adjusted returns potential and diversification across asset classes. The scheme is suitable for investors who are seeking long term capital growth.

“We are excited to announce the launch of Kotak Multi Asset Allocation Fund. This Fund is an outcome of investors’ need for a holistic asset allocation solution that would diversify across various asset classes and navigate different economic cycles. We call this our ‘Load It, Latch It, Leave It’ fund, wherein our proficient team of fund managers come together to strategize asset allocation with the collective expertise across asset classes,” said Nilesh Shah, Managing Director, Kotak Mutual Fund.

Devender Singhal, EVP, Kotak Mutual Fund, and Fund Manager for Kotak Multi Asset Allocation Fund said, “The beauty of multi-asset investing is its resilience - no single asset dictates the outcome, we endeavour to tap into the potential of each asset class. We're not just selecting securities; we're building a diversified portfolio aimed at reasonable risk-adjusted returns with moderated volatility. This fund also offers dynamism with an endeavour to increase Net Equity Allocation when markets are cheap and decrease when markets are expensive.”

Should you invest? ETMutualFunds always ask investors to invest in an NFO only if it offers something unique - that is, some investment option that is not available in the market or adding something to the existing available option.

There are around 15 schemes in the multi asset allocation category. Around six schemes have a long performance record of more than five years, three schemes are relatively new, and two schemes are under their NFO period. One scheme will open for subscription next week.

Quant Multi Asset Fund offered the highest return in the five year horizon. The scheme offered 21.96%, followed by ICICI Prudential Multi-Asset Fund which offered 15.44%. SBI Multi Asset Allocation Fund offered 11.21%. HDFC Multi-Asset Fund offered 10.92%. Axis Multi Asset Allocation Fund, and UTI Multi Asset Fund gave 9.61%, and 8.48% respectively.

Multi Asset Funds are relatively less risky and volatile. However, don’t be under the impression that they are totally risk- free. They also invest in stocks and stocks are risky and volatile in the short term. That is why we always ask investors to enter in these schemes with a minimum horizon of five years.