Investment Objective of Kotak BSE PSU Index Fund
Kotak BSE PSU Index Fund seeks to mirror the returns, before its expenses, from the BSE PSU Index by investing in the underlying securities of the index, subject to tracking errors.
Investment Strategy of Kotak BSE PSU Index Fund
The investment strategy of Kotak BSE PSU Index Fund is as follows:
- The fund follows a passive investment strategy to replicate the returns of BSE PSU Index.
- It invests in constituent stocks of the BSE PSU Index in the same proportion as in the index itself.
- The fund aims to reduce the tracking error to the lowest by rebalancing the portfolio after factoring in the change in the weights of stocks in the index and also the incremental redemptions/collections from the scheme.
- To meet the liquidity requirements of the scheme, a small part of the net assets will be held in cash or invested in debt or money market instruments permitted by SEBI/RBI including TREPS or in alternative investment for the TREPS as may be provided by the RBI.
- The fund might also invest in equity derivatives of constituents or index derivatives of the underlying index for a short duration. This will be done when specific securities of the index are insufficient, unavailable or for rebalancing at the time of change in the index or in case of corporate actions.
Who Should Invest in Kotak BSE PSU Index Fund?
Kotak BSE PSU Index Fund is ideal for investors:
- with a high risk appetite as the fund, being a sector fund, is exposed to high concentration risk
- who want to invest in a passive fund that closely mirrors the returns of BSE PSU Index