New NFO alert! Kotak Nifty Realty Index Fund closes next week—See deadline, minimum amount, allocation, expected returns

Kotak Mahindra Asset Management Company (KMAMC) on has launched a new fund offer (NFO) for the Kotak Nifty Realty Index Fund, an open-ended scheme that seeks to replicate and track the Nifty Realty Index. It gives subscribers access to the country’s evolving real estate opportunity, the company said in an official release.

India’s real estate sector is on track to become a US$1 trillion market, supported by strong residential demand, commercial expansion, infrastructure spending and urbanisation. “The opportunity spans residential, commercial, retail, hospitality and industrial warehousing segments,” it added.

The fund thus comes amid growing opportunity in the real estate sector, which is benefiting from structural shifts — increasing formalisation under frameworks such as RERA, infrastructure development, rising incomes and urbanisation. Nilesh Shah, MD of Kotak Mahindra AMC noted that India’s real estate sector is “undergoing a structural shift from a fragmented market towards a more formalised and organised industry”.

Kotak Nifty Realty Index Fund: All you should know

Satish Dondapati, Fund Manager of KMAMC added that individually investing in realty companies requires investors to navigate the sector’s cyclical nature and stock-specific risks.

“The fund seeks to replicate this index, offering investors a straightforward passive route to participate in the listed real estate sector,” he added. Here are all the key things that investors should know:

• Scheme objective: The investment objective of the scheme is to provide returns that, before expenses, corresponding to the total returns of the securities as represented by the underlying index, subject to tracking errors. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved.
• Expected returns: The Nifty Realty Index has outperformed — generating 14.14% CAGR over 3 years, 10.91% CAGR over 5 years, and 15.84% CAGR over 10 years. Thus, the Index returns are expected to correspond to the Nifty Realty Index. However, the release added that past performance may not be sustained in future and KMAMC does not guarantee or promise any returns.
• Risk category: The scheme is classified as ‘very high risk’, as per the release. Investors are thus advised to consult their financial expert before making any investment decisions.
• Fund managers: Satish Dondapati, Jeetu Valechha Sonar and Abhishek Bisen.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.