NFO: Kotak MF Will Launch Open-Ended Equity Fund

Mumbai, July 2, 2025 – Kotak Mahindra Mutual Fund has filed with SEBI for launching the Kotak Active Momentum Fund, an open-ended equity strategy that will use an in-house Enhanced Earnings factor model to find and invest in winning firms. This fund wants to do better than others by combining momentum (the tendency of high-performing firms to keep going up) with excellent earnings fundamentals. This is a more flexible way to invest than traditional factor-based investing.

Scheme Overview and Investment Strategy

The Kotak Active Momentum Fund is an equity-thematic fund. Its main goal is to make money over the long term by mostly investing in stocks and stock-related instruments that have significant earnings momentum.

The Scheme Information Document (SID) says that a proprietary Enhanced Earnings factor model would choose stocks for the portfolio based on earnings upgrades, performance consistency, ROE/ROA metrics, volatility, and other quality filters. The fund will mostly buy stocks in the Nifty 500 index, focusing on companies whose earnings are on the rise.

Asset Allocation Breakdown

• Overseas exposure: Up to 20% of net assets.
• Equity derivatives: Max 50% of equity allocation (non-hedge portion also capped at 50%).

Benchmark and Risk-O-Meter

The scheme is benchmarked against the Nifty 500 TRI, consistent with SEBI’s guidelines for momentum-themed funds. It falls under the ‘Very High’ risk category, as per the SEBI-mandated Risk-o-Meter classification.

Fund Managers

• Equity & Overseas: Mr. Rohit Tandon (PGDM, IIM Bangalore), with over 19 years of experience.
• Debt: Mr. Abhishek Bisen, a veteran debt market expert managing multiple Kotak fixed-income and hybrid schemes.

Fund Details

Special Features

• Systematic Investment Plan (SIP), Top-Up, Smart SIP
• Systematic Withdrawal & Transfer Plans (SWP/STP)
• Freedom SIP, FSIP, VTP, and Trigger facilities
• Stock lending enabled; short selling not permitted.

Regulatory Compliance & Structure

The fund complies with SEBI’s latest Master Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024. It includes:

• A 100% cap on cumulative gross exposure (equity, debt, derivatives, etc.)
• A rebalancing period of 30 business days (extendable to 60 with justification)
• A ₹10 crore minimum subscription requirement during NFO.

Taxation

• Short-term capital gains (<12 months): 20%
• Long-term capital gains (>12 months): 12.5%
• IDCW: Taxable as per investor’s applicable slab rate; TDS applicable at 10% for residents, 20% for NRIs.

About Kotak Mahindra Mutual Fund

Kotak Mahindra Mutual Fund is among India’s leading AMCs, offering a wide range of equity, debt, and hybrid mutual fund schemes. It is managed by Kotak Mahindra Asset Management Company Ltd., registered with SEBI, and headquartered in Mumbai.

Website: www.kotakmf.com

For investors seeking to ride on earnings momentum while maintaining a disciplined risk framework, the Kotak Active Momentum Fund provides a thematic equity avenue with strong quantitative underpinnings.

REF: https://www.sebi.gov.in/filings/mutual-funds/jul-2025/kotak-active-momentum-fund_94961.html

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