NFO Update: Kotak Mutual Fund launches Kotak NASDAQ 100 Fund of Funds

Kotak Mahindra Mutual Fund with asset under management (AUM) of Rs 2.2 lakh crore at the end of December 2020 and approximately 34 lakh investor folios in various schemes has launched Kotak NASDAQ 100 Fund of Funds (FoF). The new fund offer (NFO) has opened for subscription on January 11, 2021 and would close on January 25, 2021.  

The FoF will invest in units of overseas ETFs or funds like iShares NASDAQ 100 ETF, Lyxor NASDAQ 100 ETF, and USA NASDAQ 100 Index Fund, which in turn, would invest in shares listed on NASDAQ-100, currently worth 15 trillion USD. NASDAQ-100 is one of the world's major large-cap growth indices. It includes 100 of the largest domestic and international non-financial companies based on market capitalisation, which are listed on NASDAQ. These companies majorly come from information technology, telecom, retail, wholesale trade & biotechnology. Currently, about 50 per cent weightage of NASDAQ-100 is from technology stocks. It includes companies such as Apple, Microsoft, Amazon, Tesla, Facebook and Google’s parent company, Alphabet.  

Meanwhile, Arjun Khanna and Abhishek Bisen are the fund managers.      

In the last five years, NASDAQ-100 has moved by 195 per cent. A major part of this move has come last year only when the index moved by 42 per cent. This has made the valuation of the index quite expensive from a historical perspective. Therefore, it is quite unlikely that the fund will repeat its performance in the year 2021 and may see a correction. Therefore, you should not invest in this fund in lump-sum now. It is advisable to take the SIP route and that too, for those investors, who want international exposure. The minimum SIP amount is from Rs 1,000 to a minimum of six SIP installments of Rs 1,000 each.