Kotak Fixed Maturity Fund

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Fund Name: Kotak Fixed Maturity Plan - Feeder Fund Series 3

Investment Structure: Close-ended debt fund comprising of separate class shares in a Mauritius domiciled investment company.

Investment objective: The investment objective of the Fund is to generate returns through investments in debt and money market instruments. The Kotak FMP feeder Fund aims to invest into 12 month Fixed Maturity Plans™ (FMP™) offered by Kotak Mutual Fund AMC Limited or other asset management companies (AMC) in India.

Investment In: FMP offered by Kotak Mutual Fund AMC Limited or by any other AMC which essentially invest in Debt / Money Market Instruments, normally having maturities similar (as far as possible and subject to their availability) with the maturity of the overall Fund.

Maturity: 12 months (approximately)

Investment risks: Subscribers must refer to the Prospectus for the risks associated with investment in this Fund. Investments in India are subject to a number of risks including, but not limited to, risk of losing some or all of the capital invested, high market volatility, variable market liquidity, geopolitical risks (including political instability), exchange rate fluctuations (between the currency of the fund’s share class and the Indian Rupee), changes in tax regime and restrictions on investment activities of foreign investors. In addition, shares in the fund may not be readily redeemable. Past investment performance should not be viewed as a guide to, or indicator of, future performance and the value of investments and the income derived from them can go down as well as up. Investments in India should be considered only as part of a diversified overall portfolio of assets. Detailed information on the fund and associated risks is contained in the fund prospectus.

Currency: US Dollar

Minimum Investment: $100,000

Redemption Frequency: Redemption is not permitted before Maturity of the Scheme except in exceptional circumstances at sole and absolute discretion of the Directors and at such Redemption Fee as decided by the Directors which shall include but not limited to the unwinding cost of the Forward contract for currency hedge, any tax levies and surcharge applicable in India.

Please note that the units of the underlying FMP might be listed on Stock Exchange(s) and any exit would be through sale on stock exchange only. Listing of units of the underlying FMP on stock exchange(s) does not necessarily guarantee liquidity and there can be no assurance that an active secondary market for the units will develop or be maintained.

Hedging: Currency exposure may be hedged through Rupee Forward for the principal amount. The interest portion may also be hedged. The cost of hedging would be borne by the Fund.  

Initial Sales Charge: Upto 2%

Investment Management Fee: 0.50% p.a.

Other expenses: The Fund shall be subject to expenses like administration fee, custody fee, FSC fees, auditors fees, legal counsels̢۪ fees and other miscellaneous charges which shall be payable on actual.

Investment manager: Kotak Mahindra (UK) Limited

 

Key Risks: Subscribers must refer to the Private Placement Memorandum and the Application Form for the risks associated with investment in the Fund.

  • Country risk: The Portfolio is subject to the geographical, political, economic and social issues specific to India.
  • Currency risk: While the principal portion of the Fund shall be hedged, the interest portion would be subject to fluctuation in exchange rate as the underlying assets are held in Indian Rupees while the base currency is US Dollar.
  • Tax risk: Tax treatment of foreign investments in India may be varied by the Indian Government without notice.
  • Regulatory risk: The Portfolio may be restricted from investing in certain sectors or companies, or be subject to investment limits. In event of any violation of any regulatory restrictions, the Portfolio may be required to redeem its investments in the Underlying Funds.
  • Credit risk: The risk of default by borrowers whose debt is held by the fund. Corporate borrowers present a higher risk of default than governmental borrowers. This risk increases as the period to maturity increases.
  • Interest rate risk: the risk posed by increases in bank interest rate. This risk increases as the period to maturity increases.
  • Performance risk: Past investment performance or credit rating should not be viewed as a guide to, or indicator of, future performance and the value of investments and the income derived from them can go down as well as up.
  • Capital risk: All or some of the initial capital investment may be lost.
  • Redemption Risk: In the event of any Redemption by an investor, the forward contracts for the currency hedge may be cancelled to the extent of the redemption amount, if any. This may result in loss to the investors due to movement of forward premiums and the bid/offer spread in the forward contract and spot rates. Consequently, the Scheme may, depending on the market forces, even quote below its face value / NAV.

Please read the detailed information on the fund and associated risks contained in the funds private placement memorandum before investing