Kotak Equity Arbitrage Fund

Kotak Equity Arbitrage Fund is managed by Deepak Gupta and Abhishek Bisen. The fund makes use of derivatives opportunity to invest in stocks. The scheme aims to generate income through arbitrage opportunities emerging out of spot & futures market; and also through deployment of surplus cash in fixed income instruments. New investors should skip this one for better performing funds.

Where does Kotak Equity Arbitrage Fund invest your money ?

Kotak Equity Arbitrage Fund is an equity oriented hybrid fund which means most of your money will be invested in both equity and debt securities. The fund invests close to 75% of its assets in equities through derivatives. It is mid cap biased. About 11.18% of the fund’s money is allocated to stocks of small sized companies, 35.97% to stocks of mid sized companies and 52.28% to those of large companies. Mid sized stocks can give kicker returns as they turn into large stocks but this happens not so frequently.

Suitable for what?
  • HNIs
Not Suitable for what?
  • Retail Investors
How has Kotak Equity Arbitrage Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in September 2005, your value of investments would be around Rs 1.76 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.43 lakhs. The performance has not been better than or similar to other mutual funds belonging to its category. The fund has been giving at around 7.42% every year for those who stayed invested in the last 5 years.

Assume you had invested Rs 10,000 every month in this Kotak Equity Arbitrage Fund through SIP for the past 5 years today you would have around Rs 5.76 lakhs.

How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 1000 per month. Do not make the mistake of investing in too many mutual fund schemes. One good fund or at the most two are enough to take care of needs expected to arise in the medium term of 3-5 years.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
What charges apply?

If units are sold within 90 days an exit load of 0.5% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Kotak Equity Arbitrage fund is 1.00%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

What are the tax implications?

The returns in an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year.

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