Kotak Mahindra AMC unveils Kotak Banking & Financial Services Fund

This actively managed sectoral fund’s investment objective is to generate long-term capital growth through a portfolio that is primarily comprised of equity and equity-related securities of companies involved in the banking and financial services industries. “Banks are a significant part of the banking and financial services segment and are generally seen growing at 1.5 to 2.0 times the rate at which the economy grows. Hence, a continued growth momentum in the economy is likely to aid this sector going ahead,” said Kotak Mahindra AMC in a statement.

Shibani Sircar Kurian, Senior EVP, Fund Manager & Head -Equity Research at Kotak Mahindra Mutual Fund said, “We are happy to offer this fund to our customers. In India, the BFSI sector has a long way to go, considering the under penetration as compared to global averages, be it in mutual funds where only 7% of the Indian population has a fund folio compared to 23% globally, or life insurance where there is only 3% premium proportion to GDP vis a vis 10% of top 5 countries, non-life insurance penetration being less than 1% compared to 4% globally and also amongst Bank branches with just 15 branches per 1000 population compared to 27 branches in developed countries. All of this offers a growth potential within the sector.”

According to the AMC, the fund’s core advantages include opportunities for diversification within the sector, such as investment in non-banks, insurance, broking, asset management, and fintech, as well as investment opportunities across all market caps and sub-sectors in the banking and financial services sector. The fund manager would employ the Business, Management, and Valuation (BMV) strategy to find firms with good fundamentals as part of the primary investment standard.

The asset manager for the Kotak Mahindra Mutual Fund is Kotak Mahindra Asset Management Company Limited, a completely owned subsidiary of Kotak Mahindra Bank Limited (KMF). On December 31, 2022, the AMC reported having 90 branches and about 46.9 lakh investor folios across a variety of schemes. It also noted being active in 85 cities during the period.