Kotak FMP Series 305 NFO: Key things to know

Kotak Mahindra Mutual Fund has launched a new fund offer (NFO) under its “Debt category”, named as Kotak FMP Series 305. The close-ended debt fund invests in debt and money market instruments.

Investment strategy: The scheme aims to provide regular income and capital growth with limited interest rate risk to the investors through investments in a portfolio comprising of debt instruments maturing on or before the maturity of the scheme.

Asset allocation: Axis Long Duration Fund will hold an allocation of 0% to 100% of its assets in Debt Instruments & Money Market Instruments. Debt instruments with relatively high interest rate risk and relatively low credit risk.

Who should invest?

Investors with moderate risk appetite and need higher returns than a regular FD but can accept the frequent NAV fluctuations should invest in the scheme. Compared to equity funds, the fund is low risk-low return investment. However, due to the restricted liquidity, investors who are ready to park their money for the NFO tenure of 1200 days should invest in this scheme.

Risk associated: Moderately high level of risk.

Benchmark: NIFTY Medium Duration Debt Index

Fund Managers: Mr. Deepak Agrawal.

Tax Implications: As the scheme is close-ended, one needs to hold it for at least 1200 days. Therefore, it is more than 3 years you can take the benefits of indexation and get superior returns over a fixed deposit of the same tenure, especially if you are in the highest tax bracket. 

Scheme Document: https://portal.amfiindia.com/spages/13530.pdf

The NFO is available for subscription from January 05 to January 11. The schemes will list on BSE within 5 business days from the date of allotment. Investors can trade on the exchange and investors wishing to exit may do so, through BSE or any other stock exchange where the scheme will be listed.

It offers Regular Plan and Direct Plan. Click here to invest in Kotak FMP Series 305 NFO.