The Kotak Nifty Smallcap 250 Index Fund, which mimics and tracks the Nifty Smallcap 250 Index, was introduced by Kotak Mahindra Asset Management Company (KMAMC) on Monday. The public can subscribe for the fund between January 6, 2025, and January 20, 2025.
The Nifty Smallcap 250 Index, which consists of 250 companies ranked 251st to 500th within the Nifty 500 Index, is a particular indicator of the performance of small market capitalization companies. To be eligible for inclusion, companies must be part of the Nifty 500 Index but not the Nifty 100 Index or the Nifty Midcap 150 Index.
Important Scheme Information:
Scheme Name: Kotak Nifty Smallcap 250 Index Fund
Scheme Type: Others - Index Fund
Scheme Type: An open-ended plan that tracks and replicates the Nifty Smallcap 250 Index
Investment Objective: The goal of the investment is to yield returns that, subject to tracking mistakes, match the total returns of the securities that the underlying index represents. Nevertheless, there is no assurance that the investment goal will be met.
Benchmark: Nifty Smallcap 250 Index (Total Return Index)
Minimum Amount for Application: Rs. 100/- and any amount thereafter
Fund Managers: Mr. Devender Singhal, Mr. Satish Dondapati, and Mr. Abhishek Bisen
This product is appropriate for investors looking for:
Long-term increase in capital
Returns that, subject to tracking error, reflect the performance of the Nifty Smallcap 250 Index
"A significant addition to our passive product lineup, the Kotak Nifty Smallcap 250 Index Fund serves investors' interest in India's smallcap market. Key economic sectors such as capital goods, finance, healthcare, and consumption are represented by smallcaps. According to Devender Singhal, Executive Vice President & Fund Manager at Kotak Mahindra AMC, "this index-based approach allows investors to potentially benefit from the overall growth of small-sized companies, even though individual smallcap stocks may exhibit varying performance."
"Investors will have exposure to a wide range of smallcap companies in different industries through the Nifty Smallcap 250 Index.However, given the stretched values, investors should only consider investing for the long term," said Nilesh Shah, MD of Kotak AMC.
Investment strategy
The Kotak Nifty Smallcap 250 Index Fund will use a passive investment strategy in order to achieve its investment goal. The fund will regularly rebalance its portfolio to reflect shifts in the weights of the index in order to reduce tracking inaccuracy. Although the passive structure of the fund suggests a lower level of risk compared to actively managed funds, investors should be mindful of the inherent risks associated with derivatives, which can make gains and losses greater.
