Kotak Mutual plans Banking ETF

MUMBAI: Kotak Mutual has filed a draft prospectus with Securities and Exchange Board of India for an open-ended exchange traded fund, Kotak Banking ETF.

The investment objective of the scheme is to provide returns in line with that of CNX Bank Index.

Kotak Banking ETF would invest at least 90% of assets in stocks comprising the underlying index, the fund house said in its offer document.

Investors who want to limit stock specific risk by taking exposure to all the securities in CNX Bank Index at a low cost and those who seek exposure to banking sector in their asset allocation strategy will benefit from the scheme.

Investors can invest a minimum Rs 10,000 during the new fund offer. Face value of each unit will be Rs 10 during the NFO period. On allotment, the value of each unit will be equal to 1/10th of CNX Bank Index.

Investors will be charged an entry load of 3% during the NFO period. There is no exit load.

As per SEBI regulations, initial issue expenses are not permitted to be charged for open-ended schemes.