Kotak Mahindra AMC Launches India’s First Kotak MSCI India ETF

Key Facts: 

Kotak Mahindra Bank Limited is an Indian banking and financial services company headquartered in Mumbai. 

Kotak Mahindra AMC launches the country’s first ETF designed to track the MSCI India Index, a key benchmark for large- and mid-cap Indian stocks. 

Prime Highlights: 

The ETF follows a passive strategy, replicating the composition of the MSCI India Index, with regular rebalancing to minimize tracking error. 

The ETF opens for public subscription on January 29, 2025, with the New Fund Offer (NFO) closing on February 12, 2025. Continuous trading will begin on or before February 27, 2025. 

The scheme carries a very high risk, suitable for investors with a long-term investment horizon, aiming for capital appreciation. 

Key Background: 

Kotak Mahindra Asset Management Company (KMAMC) has unveiled the Kotak MSCI India ETF, marking the launch of India’s first exchange-traded fund (ETF) designed to track the MSCI India Index. This open-ended scheme opens for public subscription on January 29, 2025, and its New Fund Offer (NFO) will close on February 12, 2025. The ETF will reopen for continuous trading on or before February 27, 2025. 

The Kotak MSCI India ETF is designed to mirror the performance of the MSCI India Index, a widely recognized benchmark that includes large- and mid-cap companies that are crucial to India’s economic growth. The scheme is classified under a very high-risk category, as noted in the Scheme Information Document (SID). 

As part of its international reach, Kotak Group’s global arm, Kotak International, has also launched the Kotak MSCI India ETF Fund, which mirrors the same benchmark for international investors. Nilesh Shah, Managing Director of KMAMC, emphasized that the ETF is a unique investment vehicle that provides both domestic and global investors the opportunity to tap into India’s long-term growth potential. “This fund is ideal for investors with a long-term investment horizon who believe in India’s future growth story,” he said. 

The ETF’s strategy focuses on passive management, with the aim of replicating the composition of the MSCI India Index. To minimize tracking error, the fund will rebalance its portfolio as required by changes in the index composition. 

The minimum investment during the NFO is set at Rs 5,000, with subsequent investments in multiples of Rs 10 per unit. The scheme does not charge any entry or exit loads, providing an attractive proposition for investors. The fund is managed by Devender Singhal and Abhishek Bisen. This ETF is targeted at investors seeking long-term capital appreciation by investing in the top companies shaping India’s future, with the added benefit of direct exposure to the MSCI India Index.