Is Kotak MNC Fund NFO Good or Bad? - Detailed Review

Kotak Mutual Fund is launching its New Fund offer for a fund called Kotak MNC Fund. This NFO will be open from October 7, 2024, to October 21, 2024. In this article, we'll provide comprehensive details of Kotak MNC Fund, what the fund invests in and the risk associated with the fund

Details of the Kotak MNC Fund

Fund Manager of Kotak MNC Fund

Kotak MNC Fund is co-managed by Mr.Dhananjay and Mr. Abhishek Bisen. Further details about them are mentioned below:

• Mr.Dhananjay Tikariha

Qualification: B. Tech, M. Tech, PGDM

Business Experience: Overall 17 years of experience in Equity Research, Fund Management, and Project Finance. Prior to joining Kotak Mahindra AMC, he has also worked at IDFC Ltd.

Schemes Managed: Kotak Healthcare Fund

• Mr.Abhishek Bisen

Qualification: B A Management, MBA Finance EPAF- IIM-C

Business Experience: He has been with the company since October 2006 and is primarily responsible for managing debt schemes. Before joining Kotak AMC, he worked with Securities Trading Corporation of India Ltd, where he was involved in sales and trading of fixed-income products, as well as portfolio advisory. He also gained two years of experience in merchant banking with a prominent firm prior to that. 

Schemes Managed: The fund manager is responsible for managing 43 different funds. Some of the funds managed are the Kotak Multicap Fund, Kotak Banking and Financial Services Fund, Kotak Bond Short Term Fund, and Kotak Gold ETF.

Concept of Kotak MNC Fund

Kotak MNC Fund is an open-ended equity scheme following the Multi-national Companies (MNC) theme. The companies that are considered MNC’s are listed below:

• Indian Multinational Companies: Indian companies that get more than 50% of their income or own more than 50% of their assets from outside India.

• Trans National Companies: Companies that operate in several countries and earn more than half of their income or own more than half of their assets in countries other than where they are based.

• Joint Ventures with Foreign Companies: Indian companies that are part of a joint venture with a foreign company, where the foreign company owns more than 26% of the shares or voting rights.

• Subsidiaries of Foreign Companies: Indian companies where foreign companies hold more than 50% of the shares or voting rights.

The allocations for this fund can be done the following way that in mention in the table. 

Objective of the Kotak MNC Fund

The investment objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested primarily in equity and equity-related securities of multinational companies (MNCs). However, there is no certainty that the objective of the scheme will be achieved.

Risks involved in this Fund

• The scheme will primarily invest in the equity and equity-related instruments of companies classified as Multinational Companies (MNCs), and is therefore exposed to risks specific to such companies.

• Since the scheme focuses on a particular set of companies (MNCs), any volatility or poor performance from these companies can significantly impact the scheme's overall performance.

• The scheme is exposed to concentration risk because it is required to invest in a specific sector, making the portfolio's NAV more volatile compared to a diversified portfolio.

• This concentration may also lead to higher liquidity risks, particularly if there are large redemptions, which could affect the scheme's ability to manage its assets efficiently.

Why You should Invest in Kotak MNC Fund?

You should invest in the Kotak MNC Fund if you are seeking long-term capital growth which invests in predominantly in equity and equity related securities of multi-national companies (MNC)

Overview of the Kotak Mutual Fund

Kotak Mutual Fund is a part of the well-known Kotak Mahindra Bank Limited and has been around since 1998, making it one of the most experienced players in the industry. It's the 5th largest mutual fund in India as of March 2023, managing investments for over 8.1 million investors. 

With a vast network of more than 50,000 distributors, Kotak Mutual Fund offers a variety of mutual fund schemes to suit different risk and return preferences As reported on December 2023, the Kotak Mutual Fund manages an AUM of Rs. 3,53,913 crores.

Top Performing Funds of Kotak Mutual Fund

Peer Comparison: Kotak MNC Fund vs Other Such Fund

Highest Return of Such Funds

Lowest Return of Such Funds

Here, since all the above mutual funds track the same index, the returns generated by these mutual fund schemes have relatively similar returns in 1-year.