Kotak Sensex ETF: Exchange Traded Fund

Kotak Asset Management company has come out with the NFO for their newly introduced ETF or Exchange Traded Fund. The Kotak Sensex ETF is the latest offering from the stable of Kotak AMC and will add to the list of ETF ‘s available in India for investors who are interested in buying the ETF shares.

Which benchmark index will the Kotak Sensex ETF track?
The Kotak Sensex ETF will be tracking the standard BSE Sensex Index, which comprises of the top 30 stocks listed on BSE in the order of market capitalization.

What is the investment objective of the Kotak Sensex ETF?
The investment objective of the scheme is to provide returns that closely correspond to the total returns of the BSE SENSEX subject to tracking errors.
Tracking error is basically the deviation by which the fund returns will deviate from the benchmark index. For e.g. if BSE Sensex gives a return of 20% in 1 year and Kotak Sensex ETF gives a return of 19% in the same year, then the tracking error will be 1% - Kotak Sensex ETF lagging behind the BSE Sensex.

Related: ETF: An example with returns calculations,  Simplest way to Invest in ETF,  Gold ETF

When will the Kotak Sensex ETF open for subscription?
The scheme is open to subscribers for applying for ETF shares between May 7th to May 16th, 2008.

What is the Minimum investment for Kotak Sensex ETF application?
Minimum application amount for Kotak Sensex ETF Rs. 10,000 and later in the multiples of Rs. 1,000.

Any entry load for Kotak Sensex ETF during the NFO period?
Yes. For investments less than 1 Crore, 1% entry load will be charged. Zero entry load for investments more than 1 Crore.
After the NFO period, when the shares will be listed on the exchanges, the standard brokerage charges may apply.

However, there is some respite for people who want to directly apply to the Kotak AMC.
No entry load shall be charged on all direct applications received by AMC i.e., on application forms that are not routed through any distributor / agent / broker and submitted to AMC office or collection centre / investment service centre.

People who prefer ETF investments, can apply for this ETF. Better to apply directly to Kotak AMC, that will ensure no load charges.

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