Kotak Mutual Fund has launched Kotak Balanced Advantage Fund, an open-ended dynamic asset allocation fund with an aim to generate capital appreciation from a dynamically balanced portfolio of equity and equity related securities, debt, and money market securities. The fund will follow a multi-cap approach for equity allocation and dynamic bond approach for debt allocation.
The NFO opens on July 13, 2018 and closes on July 27, 2018.
Harsha Upadhyaya, Chief Investment Officer (Equity), Kotak Mutual Fund said, “The fund is designed with an objective to generate capital appreciation by factoring in volatility and thereby dynamically adjusting allocation between asset classes based on valuations and market trend. This is suitable for all investors – whether first time or sophisticated, to help them participate in wealth creation and compounding potential of equity over long term.”
The fund follows a broad allocation on an investment model based on trailing Nifty P/E and trend/sentiment data. The investment model keeps net equity exposure low when the market valuations are high and vice versa.
“Historical back-tested calculations of the model of five year daily rolling returns since September 2004 showed that the investment doubled in 5 to 8 years’ time span giving better compounding in comparison to traditional investments. The fund aims to invest 65%-100% in Indian equities and equity related securities. The net equity exposure can be brought down significantly below 65% by hedging through equity derivatives,” added Upadhyaya.
