kotak mf appln

8/8/2019 kotak mf appln

1/20

36-38A, Nariman Bhavan227, Nariman Point Mumbai - 400 021

Kotak Mahindra Mutual Fund

KEY INFORMATION MEMORANDUM& APPLICATION FORMS

THE DATE OF THIS KEY INFORMATION MEMORANDUM IS APRIL 30, 2010

This Key Information Memorandum (KIM) sets forth the information, which a prospective investor ought to know before investing. For further details ofthe Scheme(s) / Mutual Fund, Due diligence certificate by the AMC, Key Personnel, Investors rights & services, Risk Factors, Penalties &Pending Litigations, Associate Transactions, etc. investors should, before investment, refer to the Schemes information document andstatement of additional information available free of cost at any of the Official Acceptance Points or distributors or from the websitewww.kotakmutual.com.The Scheme(s) particulars have been prepared in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996,as amended till date, and filed with Securities and Exchange Board of India (SEBI). The Units being offered for public subscription have notbeen approved or disapproved by SEBI, nor has SEBI certified the accuracy or adequacy of this KIM.

THE SPONSORKotak Mahindra Bank Ltd.36-38A, Nariman Bhavan227, Nariman PointMumbai - 400 021

THE TRUSTEEKotak Mahindra Trustee Co. Ltd.36-38A, Nariman Bhavan227, Nariman PointMumbai - 400 021

THE ASSET MANAGEMENT COMPANYKotak Mahindra Asset Management Co. Ltd.36-38A, Nariman Bhavan227, Nariman PointMumbai - 400 021

CONTINUOUS OFFER:Unit of all Schemes available at prices related to Applicable NAV

KOTAK 30

Kotak Mahindra 30 Unit Scheme An Open-Ended Equity Growth Scheme

Continuous Offer from 21-Jan-1999

KOTAK MID-CAP

Kotak Midcap Scheme An Open-Ended Equity Growth Scheme

Continuous Offer from 25-Feb-2005

KOTAK EMERGING EQUITY SCHEME

Kotak Emerging Equity Scheme An Open-Ended Equity Growth Scheme

Continuous Offer from 31-Mar-2010

KOTAK OPPORTUNITIES

Kotak Opportunities An Open-Ended Equity Growth Scheme

Continuous Offer from 10-Sep-2004

KOTAK BALANCE

Kotak Mahindra Balance UnitScheme 99

An Open-Ended Balanced SchemeContinuous Offer from 29-Nov-1999

KOTAK CONTRA

Kotak Contra Scheme An Open-Ended Equity Growth Scheme

Continuous Offer from 27-July-2005

KOTAK TAX SAVER

Kotak Tax Saver Scheme An Open-Ended Equity-Linked Savings

SchemeContinuous Offer from 25-Nov-2005

KOTAK LIFESTYLE

Kotak Lifestyle Fund An Open-Ended Equity Growth Scheme

Continuous Offer from 24-Mar-2006

KOTAK EQUITY FOF

Kotak Equity FOF An Open-Ended Equity Fund of Funds

SchemeContinuous Offer from 10-Aug-2004

KOTAK SELECT FOCUS FUND

Kotak Select Focus Fund An Open-Ended Equity Scheme

Continuous Offer from 18-Sep-2009

KOTAK EQUITY ARBITRAGE FUND

Kotak Equity Arbitrage Fund An Open-Ended Equity Oriented Scheme

Continuous Offer from 3-Oct-2005


2/20

KEY INFORMATION MEMORANDUM

Open-Ended Equity Growth Scheme Open - Ended Equity Growth SchemeScheme Name

To generate capital appreciation from a portfolio of predominantly equity related securities.The portfolio will generally comprise of equity and equity related instruments of around 30companies which may go up to 39 companies.

To generate capital appreciation from a diversified portfolio of equity and equity relatedsecurities.

Risk Profile of theScheme

Plans & Options Plan: Nil Option: Dividend Payout, Dividend Reinvestment & Growth Plan: Nil Option: Dividend Payout, Dividend Reinvestment & Growth

InvestmentObjective

Mr. Krishna Sanghvi and Mr. Anurag Jain. Mr. Krishna Sanghvi and Mr. Pankaj TibrewalName of theFund Managers

Kotak Mahindra Trustee Company Limited Kotak Mahindra Trustee Company LimitedName of theTrustee Company

S&P CNX Nifty S&P CNX 500Benchmark Index

Mutual Fund Units involve investment risks including the possible loss of principal. Please read the SID carefully for details on risk factors before investment. Scheme specific Risk Factors aresummarized on page 11.

KOTAK 30 KOTAK OPPORTUNITIES

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 forswitches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: Rs. 1,000 or 100 units, If the holding is less than Rs. 1000 or 100 units, afterprocessing the redemption request, the entire amount/ units will be redeemed from the

Scheme.

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re0.01 for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/-each).Redemption: Rs. 1,000 or 100 units, If the holding is less than Rs. 1000 or 100 units,

after processing the redemption request, the entire amount/ units will be redeemed fromthe Scheme.

MinimumApplicationAmount/ Numberof Units

Kotak 30*

S&P CNX Nifty

Kotak Opportunities*

S&P CNX 500

8 2

. 3 0

3 1

. 5 9

- 3 4

. 6 2

6 9

. 9 4

9 . 3

1

- 3 6

. 2 6

7 1

. 5 2

2 3

. 8 9

1 2

. 3 1

6 4

. 5 6

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

2005-06 2006-07 2007-08 2008-09 2009-10

R e t u r n s

9 8

. 5 0

3 4

. 9 7

- 4 0

. 2 2

8 9

. 5 5

6 1

. 2 1

2 1

. 6 4

- 3 9

. 8 9

8 5

. 5 4

7 . 9

3

8 . 0

7

-80.00

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2005-06 2006-07 2007-08 2008-09 2009-10

R e

t u r n s

%

2

Asset AllocationPattern of theScheme

*Debt securities/instruments are deemed to include securitised debt and investment insecuritised debt will not exceed 50% of debt portion of the Scheme.Note: The asset allocation shown above is indicative and may change for a short term ondefensive considerations. Review and rebalancing will be conducted when the asset allocationfalls outside the range indicated above.

Investments Indicativeallocation Risk profile

Equity and equity related securities* Debt and Money Market Instruments

65% to 100%0% to 35%

Medium to HighLow to Medium

The Scheme will not invest in securitised debts.Note: The asset allocation shown above is indicative and may vary according tocircumstances at the sole discretion of the Fund Manager, on defensive consideration.Review and rebalancing will be conducted when the asset allocation falls outside t he rangeindicated above. If the exposure falls outside the above range, it will be restored within threeWorking Days.


Equity and equity related securitiesDebt and Money Market Instruments

65% to 95%5% to 35%

Medium to HighLow

Applicable NAV(after the schemeopens forrepurchase & sale)

Please refer to page 11 for details.

Within 10 working days of the receipt of the redemption request at the authorised centre of the Kotak Mutual Fund.

Despatch ofRepurchase(Redemption)Request

Trustee's Discretion. Please refer to page 11 for details.Dividend Policy

CompoundedAnnualisedReturns (%)

Last 1 year

Last 3 yearsLast 5 years

Since Inception

73.76

11.1420.85

17.27

91.39

15.2727.38

29.91

87.95

11.0819.45

22.46

70.43

13.1521.80

24.37

Kotak 30 Kotak OpportunitiesS&P CNX Nifty S&P CNX 500

Performance of the Scheme (as on March 31, 2010) Performance of the Scheme (as on March 31, 2010)

Absolute Returns (%) for each financial year for the last 5 years Absolute Returns (%) for each financial year for the last 5 years

Expenses of theScheme Entry Load: Nil

Exit Load: 1) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment

of units, irrespective of the amount of investment: 1%2) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of

units, irrespective of the amount of investment: NIL3) Where units are allotted upon Reinvestment of Dividends: NIL

Entry Load: NilExit Load: 1) For redemptions / switch outs (including SIP/STP) within 1 year from the date of

allotment of units, irrespective of the amount of investment: 1%2) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment

of units, irrespective of the amount of investment: NIL3) Where units are allotted upon Reinvestment of Dividends: NIL

(i) Load Structure

(ii) Recurringexpenses (% ofweekly averagenet assets)

First Rs. 100 crores: 2.50%Next Rs. 300 crore: 2.25%Next Rs. 300: 2.00%Balance: 1.75%


Waiver of Load for Direct Applications: Not applicable. Please refer to page 11 for details.Tax Treatment for the investors: Investor is advised to refer to the details in the Statement of Additional Information and also independently refer to his tax advisor.

Daily Net Asset Value (NAV) Publication:

For Investor Grievances please contact: Please refer to page 1 for details.Unitholders' Information: Please refer to page 12 for details.


2

Actual expenses for theprevious Financial Year endedMarch 31, 2009(Audited): 2.19% P. A.

Actual expenses for theprevious Financial Year endedMarch 31, 2009(Audited): 2.16% P. A.

AUM: Rs. 990.14 crores. Folio: 165105 AUM: Rs. 1071.40 crores. Folio: 222161AUM and Folio

December 29,1998 September 9, 2004Inception Date

*All payouts during the period have been reinvested in the units of the scheme at the then prevailing NAV. Past Performance may or may not be sustained in future.

Investment Strategy & Risk Measures: Please refer to pages 8 - 10 for details.

Continuous Offer Continuous Offer


3/20


Open-Ended Equity Linked Saving Scheme Open - Ended Equity Growth SchemeScheme Name

To generate long-term capital appreciation from a diversified portfolio of equity and equityrelated securities and enable investors to avail the income tax rebate, as permitted from time totime.


InvestmentObjective

KOTAK TAX SAVER KOTAK MID-CAP


*Debt securities shall be deemed to include securitised debts (excluding foreign securitiseddebt) and investment in securitised debts shall not exceed 50% of the debt component of theScheme. Investments may be made in foreign debt securities not exceeding 20% of the debtcomponent of the Scheme. However, investments made in foreign debt securities would notinclude investment in foreign securitised debt.Investments may be made in GDRs/ADRs not exceeding 20% of the net assets scheme. TheScheme may engage in stock lending not exceeding 20% of the net assets of the Scheme.The above percentages will be reckoned at the time of investment and the above allocation isbased on a steady state situation.Note: The asset allocation shown above is indicative and may vary according to circumstancesat the sole discretion of the Fund Manager, on defensive consideration. Review and rebalancingwill be conducted when the asset allocation falls outside the range indicated above. If theexposure falls outside the above range, it will be restored within Seven Working Days.


Equity and equity related securitiesDebt and Money Market Securities*

80% to 100%0% to 20%


Note: The asset allocation (between asset classes A and B) shown above is indicative andmay vary according to circumstance at the discretion of the Fund Manager, on defensiveconsideration. Review and rebalancing will be conducted when the asset allocation(between asset classes A and B) falls outside the range indicated above. If the exposure fallsoutside the above range, it will be restored within Ten Working Days

The asset allocation between A1 and A2 as indicated above shall be reviewed at the end ofevery calendar quarter and rebalancing, if required will be conducted within a month ofreview. The Scheme will not invest in securitised debt.


Plans & Options Plan: Nil Option: Dividend Payout, Dividend Reinvestment (lock in period of 3 yrs) & Gr owth Plan: Nil Option: Dividend Payout, Dividend Reinvestment & Growth

Mr. Pankaj Tibrewal & Mr. Anurag Jain. Mr. Pankaj Tibrewal & Mr. Anurag Jain.Name of theFund Managers


S&P CNX 500 CNX MidcapBenchmark Index


Initial Investment: Rs. 500/- and in multiples of Rs. 500.

Additional Investment: Rs. 500/- and in multiples of Rs. 500.SIP Investment: Rs. 500/- and in multiples of Rs. 500.Redemption: If the holding is less than Rs. 1000 or 100 units, after processing the redemptionrequest, the entire amount/units will be redeemed from the Scheme. (After expiry of lock inperiod of 3 years)

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01

for switches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re0.01 for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/-each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing theredemption request, the entire amount/units will be redeemed from the Scheme.

Minimum

ApplicationAmount/ Numberof Units

Kotak Tax Saver*

S&P CNX 500

Kotak Midcap*

CNX Midcap






Compounded

AnnualisedReturns (%)

Last 1 year

Last 3 years

Last 5 years

Since Inception

87.95

11.08

-

16.06

109.62

5.26

17.32

16.68

126.12

16.65

21.35

20.56

87.55

7.27

-

13.11

Kotak Tax Saver Kotak MidcapS&P CNX 500 CNX Midcap



Expenses of theScheme

Entry Load: NilExit Load: Exit Load is not applicable




(i) Load Structure





Daily Net Asset Value (NAV) Publication:For Investor Grievances please contact: Please refer to page 1 for details.Unitholders' Information: Please refer to page 12 for details.

Please refer to page 11 for details.2

Actual expenses for theprevious Financial Year endedMarch 31, 2009

(Audited): 2.32% P. A.

Actual expenses for theprevious Financial Year endedMarch 31, 2009

(Audited): 2.45% P. A.


November 23, 2005 February 24, 2005Inception Date




3

6 . 5

1

8 5

. 6 7

8 . 0

7

- 3 9

. 8 9

8 5

. 5 4

- 4 3

. 5 8

1 7

. 9 4

2 1

. 6 4

-80.00

-60.00

-40.00

-20.000.00

20.00

40.00

60.00

80.00

100.00

2 00 6- 07 20 07 -08 20 08 -09 2 009 -1 0

R e t u r n s


Equity and Equity related instrumentsMidcap StocksOther than Midcap StocksDebt and Money Market Securities

65% to 100%65% to 100%

0 to 35%0 to 35%

HighHighHighLow

AssetClass

AA1A2B

9 3

. 9 9

- 2 . 7

4

6 . 9

9

1 0 8

. 7 4

- 4 5

. 1 1

1 2 4

. 5 1

- 4 7

. 3 7

1

. 3 1 2

8 . 6

7 5 9

. 9 6

-90.00

-60.00

-30.00

0.00

30.00

60.00

90.00

120.00

150.00

2005-06 2006-07 2007-08 2008-09 2009-10

R e t u r n s

%


4/20


Open-Ended Balanced Scheme Open - Ended Equity Growth SchemeScheme Name

To achieve growth by investing in equity & equity related instruments, balanced with incomegeneration by investing in debt & money market instruments.

The investment objective of the fund is to generate long term capital appreciation from aportfolio of equity and equity related securities, generally diversified across companies,which are likely to benefit by changing lifestyle and rising consumerism in India.

InvestmentObjective

KOTAK BALANCE KOTAK LIFESTYLE


*Debt securities/instruments are deemed to include securitised debt and investment insecuritised debt will not exceed 50% of the debt portion.Note: The asset allocation shown above is indicative and may change depending on the FundManager's view of the market conditions for a short term on defensive considerations. Theabove allocation may change to maintain the ratio required for the Scheme to qualify as anequity oriented scheme under Sections 115R and 115T of Income Tax Act, 1961. Under thesaid provision, dividend distributed by Equity oriented schemes is exempt from dividenddistribution tax. However, the equity exposure can vary between 50% and 70% of the netassets of the Scheme. If the exposure falls below the said lower limit or exceeds the upper limit,it will be restored within Seven (7) Working Days.


Equity and equity related securities* Debt and Money Market Instruments

51%49%


*If permitted by SEBI under extant regulations/guidelines, the scheme may also engage instock lending, not exceeding 20 % of the net assets of the Scheme, provided the minimumcorpus of the scheme is Rs.100 Crores. The scheme may upto 25% of net assets invest inADR/GDRs and foreign equity securities, subject to applicable regulations.**Debt instruments shall include investments in Foreign Debt Securities not exceeding 25%of the net assets of the debt component.However, no investments will be made in foreign securitised debt. From time to time theScheme may hold cash. Investments will also be made in derivative instruments notexceeding 25% of the net assets of the Scheme.Note: The asset allocation shown above is indicative and may vary according tocircumstances at the sole discretion of the Fund Manager, on defensive consideration.Review and rebalancing will be conducted when the asset allocation falls outside the rangeindicated above. If the exposure falls outside the above range, it will be restored within SevenWorking Days.


Plans & Options Plan: Nil Option: Dividend Payout & Dividend Reinvestment Plan: Nil Option: Dividend Payout, Dividend Reinvestment & Growth

Mr. Sajit Pisharodi, Mr. Krishna Sanghvi & Mr. Abhishek Bisen. Mr. Emmanuel Elango & Mr. Krishna SanghviName of theFund Managers


Crisil Balanced Fund Index S & P CNX 500Benchmark Index


Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 forswitches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing theredemption request, the entire amount/units will be redeemed from the Scheme.

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re0.01 for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/-each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing theredemption request, the entire amount/units will be redeemed from the Scheme.


Kotak Balance*

Crisil BalancedFund Index

Kotak Lifestyle*

S&P CNX 500





Half yearly (25th of March/ September) Trustee's Discretion. Please refer to page 11 for details.Dividend Policy


Last 1 year

Last 3 years

Last 5 years

Since Inception

47.31

11.37

15.91

NA

73.75

0.07

-

3.89

87.95

11.08

-

11.22

45.45

8.16

14.99

17.25

Kotak Balance Kotak LifestyleCRISIL Balanced Fund Index S&P CNX 500










(i) Load Structure

(ii) Recurringexpenses (% of

weekly averagenet assets)






Actual expenses for theprevious Financial Year ended

March 31, 2009(Audited): 2.50% P. A.


March 31, 2009(Audited): 2.45% P. A.


November 25, 1999 March 21, 2006Inception Date




6 0

. 8 9

2 1

. 3 2

5 7

. 0 4

3 7

. 0 4

9 . 4

7 1 9

. 5 2

- 2 1

. 5 9

- 2 6

. 9 2

2 . 1

9

4 5

. 9 6

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

2005-06 2006-07 2007-08 2008-09 2009-10

R e t u r n s

1

3 . 0

1

- 0

. 3 0

7 3

. 3 1

8 . 0

7 2 1

. 6 4

- 3 9

. 8 9

8 5

. 5 4

- 4 1

. 7 7

-80.00

-60.00

-40.00

-20.00

0.0020.00

40.00

60.00

80.00

100.00

2 00 6- 07 2 007 -0 8 2 00 8- 09 2 00 9- 10

R e t u r n s

4


Equity and Equity related securities *Debt & Money Market Instruments **Securitised Debt

65% to 100%0% to 35%0% to 18%

Medium to HighLowLow


5/20


Open - Ended Equity Growth Scheme Open - Ended Equity Fund of Funds SchemeScheme Name


The Investment Objective of the Scheme is to generate long term capital appreciation from aportfolio created by investing predominantly in open-ended diversified equity schemes ofMutual Funds registered with SEBI.

InvestmentObjective

KOTAK CONTRA KOTAK EQUITY FOF


*Debt securities/instruments are deemed to include securitised debt and investment insecuritised debt will not exceed 50% of the debt portion.Note: The asset allocation shown above is indicative and may vary according to circumstancesat the sole discretion of the Fund Manager, on defensive consideration. Review andrebalancing will be conducted when the asset allocation falls outside the range indicatedabove. If the exposure falls outside the above range, it will be restored within Seven BusinessDays.


Equity and equity related securitiesDebt and Money Market Securities*

65% to 100%0% to 35%


* The Fund Manager will normally invest in Kotak Mahindra Liquid Scheme and KotakMahindra Floater Short Term Scheme. However, the Fund Manager may invest in any otherscheme of a mutual fund registered with SEBI, which invest predominantly in the moneymarket or floating rate securities.The asset allocation shown above is indicative and may vary according to circumstances atthe sole discretion of the Fund Manager, on defensive consideration. Review and rebalancingwill be conducted when the asset allocation falls outside the range as indicated above. If t heexposure falls outside the above range, it will be restored within 10 (Ten) Working Days.



Mr. Emmanuel Elango & Mr. Anurag Jain Mr. Sajit Pisharodi & Mr. Deepak GuptaName of theFund Managers


S & P CNX 500 S & P CNX NiftyBenchmark Index


Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 forswitches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: Rs. 1,000 or 100 units, If the holding is less than Rs. 1000 or 100 units, afterprocessing the redemption request, the entire amount/ units will be redeemed from theScheme.

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 forswitches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: Rs. 1,000 or 100 units, If the holding is less than Rs. 1000 or 100 units, afterprocessing the redemption request, the entire amount/ units will be redeemed from theScheme.


Kotak Contra*

S & P CNX 500

Kotak Equity FOF*

S & P CNX Nifty







Last 1 year

Last 3 years

Last 5 years

Since Inception

87.95

11.08

-

17.37

85.99

13.05

21.51

24.79

73.76

11.14

20.85

22.86

86.62

13.48

-

15.73

Kotak Contra Kotak Equity FOFS&P CNX 500 S&P CNX Nifty










(i) Load Structure




As per SEBI Circular No. MFD/CIR No. 04/11488/2003dated June 12, 2003, in case of Fund of Funds Scheme, thetotal expenses of the scheme including management feesshall not exceed 0.75% of the daily average net assets.





March 31, 2009(Audited): 2.50% P. A.


March 31, 2009(Audited): 0.75% P. A.


July 27, 2005 August 9, 2004Inception Date




8 4

. 9 7

8 . 0 7

- 3 9

. 8 9

8 5

. 5 4

- 3 0

. 9 7

1

3 . 1

7

- 0

. 0 6

2 1

. 6 4

-80.00

-60.00

-40.00

-20.00

0.0020.00

40.00

60.00

80.00

100.00

2 006 -0 7 2 00 7- 08 20 08- 09 20 09 -10

R e t u r n s

1 9

. 2 6

8 6

. 0 6

6 4

. 5 6

1 2

. 3 1

2 3

. 8 9

7 1

. 5 2

7 1

. 0 8

5 . 3

8

- 3 4

. 8 4

- 3 6

. 2 6

-60.00

-40.00

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

2005-06 2006-07 2007-08 2008-09 2009-10

R e t u r n s

Indicative RiskAllocation*Investments Profile Risk

Open Ended Diversified equityschemes

Medium to High90 to 100%%

0% to 10% Low

Reverse repo and/ or CBLO and/or short- termfixed deposits and/ or Schemes which investpredominantly in the money market or floatingrate securities *

The asset allocation under the Scheme, under normal circumstances, will be as follows:

5


6/20


Open - Ended Equity Scheme Open-Ended Equity Growth SchemeScheme Name

The investment objective of the scheme is to generate long-term capital appreciation from aportfolio of equity and equity related securities, generally focused on a few selected sectors.

The investment objective of the scheme is to generate long-term capital appreciation from aportfolio of equity and equity related securities, by investing predominantly in mid and smallcap companies.

InvestmentObjective

KOTAK SELECT FOCUS FUND KOTAK EMERGING EQUITY SCHEME


*Debt instruments shall be deemed to include securitised debts (excluding foreign securitised

debt) and investment in securitised debts shall not exceed 50% of Debt and Money Marketinstruments. This will also include margin money for derivative transactions. The scheme mayalso invest in derivatives upto a maximum of 100% of the portfolio value.From time to time the Scheme may hold cash for the following reasons: To meet the redemption requirements Due to lag in deal date and value date of acquiring an asset If in opinion of the Fund Manager it is in interest of unit holders to hold cash.Note: The asset allocation shown above is indicative and may vary according to circumstancesat the sole discretion of the Fund Manager, on defensive consideration. Review and rebalancingwill be conducted when the asset allocation falls outside the range indicated above. If theexposure falls outside the above range, it will be restored within 30 days.


Equity and equity related securitiesDebt & Money Market Instruments *

65% to 100%0% to 35%


The asset allocation shown above is indicative and may vary according to circumstances at thesole discretion of the Fund Manager, on defensive consideration. Review and rebalancing will beconducted when the asset allocation falls outside the range indicated above. If the exposure fallsoutside the above range, it will be restored within 10 Business Days.If permitted by SEBI under extant regulations/guidelines, the scheme may also engage in stocklending, not exceeding 20 % of the net assets of the Scheme, provided the minimum corpus ofthe scheme is Rs.100 Crore. Investments will be made in derivatives instruments upto 35% of thenet assets of the Scheme.* Debt instruments shall be deemed to include securitised debts and investment in suchsecuritised debts shall not exceed 25% of the net assets of the scheme. The total investmentvalue of equity, debt instruments and notional value of Investment in derivatives shall not exceed100% of the net assets of the scheme.From time to time the Scheme may hold cash.For the purpose of determining market capitalisation, the scheme will follow the marketcapitalisation range provided by Value Research, or other such agency as may be designated bythe AMC, at the end of every calendar quarter. For the purpose of monitoring the investmentallocation between 'mid and small cap companies' and other companies, the definition asprovided by the designated agency, currently Value Research, at the end of the previous calendarquarter would be considered and followed for the subsequent calendar quarter. The scheme willreset the allocation as per the new definition within 15 Business days from the receipt of suchclassifications.Over the last 8 quarters, the range has varied for midcap stocks in portfolio from 39% to 67%and small cap has varied from 9 % to 28%. The scheme has on an average invested around 60%of its corpus in midcap stocks and around 20% in small cap stocks.



Mr. Krishna Sanghvi , Mr. Emmanuel Elango & Mr. Abhishek Bisen Mr. Emmanuel Elango, Mr. Anurag Jain & Mr. Abhishek Bisen.Name of theFund Managers


S & P CNX Nifty BSE MID CAPBenchmark Index


Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 forswitches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing theredemption request, the entire amount/units will be redeemed from the Scheme

Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01for switches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re0.01 for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/-each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing theredemption request, the entire amount/units will be redeemed from the Scheme


Applicable NAV (afterthe scheme opens forrepurchase & sale)






Last 1 year

Last 3 years

Since Inception

100.77

3.29

3.27

-

-

-

130.23

9.13

8.11

Kotak Emerging Equity Scheme BSE MID CAP


6

Absolute Returns (%) for each financial year for the last 3 years





Entry Load: Nil

Exit Load: 1) For exit within 1 year from date of allotment of units : 1%.2) For exit after 1 year from the date of allotment of units : Nil.

(i) Load Structure








Actual expenses for the previousFinancial Year ended March 31,2009 (Audited): The scheme isnew, hence data not available.


March 31, 2009(Audited): 2.43% P. A.

AUM: Rs. 204.51 crores. Folio: 21632 AUM: Rs. 128.97 Crores. Folio: 38084AUM and Folio

September 11, 2009 March 30, 2007Inception Date




Kotak EmergingEquity Scheme*

BSE MID CAP 8

. 3 3

- 4 9

. 3 3

1 0 0

. 7 6

2 3

. 3 9

- 5 4

. 0 1

1 3 0

. 2 3

-100.00

-50.00

0.00

50.00

100.00

150.00

2007-08 2008-09 2009- 10

R e t u r n s

The scheme is new, hence does not have any performance track record.

Low

Investments Indicative allocation Risk profileEquity & Equity related securities of which

Mid and small cap companies Other Companies

Debt & Money Market Instruments *

65% to 100%65% to 100%

0% to 35%0% to 35%

Medium to High


7/20


Open - Ended Equity Growth SchemeScheme Name

The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equitymarket, and by investing the balance in debt and money market instruments.

InvestmentObjective

KOTAK EQUITY ARBITRAGE



Plans & Options Plan: Nil Option: Dividend Payout, Dividend Reinvestment & Growth

Mr. Sajit Pisharodi, Mr. Deepak Gupta & Mr. Abhishek BisenName of theFund Managers

Kotak Mahindra Trustee Company LimitedName of theTrustee Company

CRISIL Liquid Fund IndexBenchmark Index


Initial Investment: Rs. 5000/- and in multiples of Re. 1 for purchases and for Re 0.01 for switches.Additional Investment: Rs. 1000/- and in multiples of Re. 1 for purchases and for Re 0.01 for switches.SIP Investment: Rs. 1000/- (Subject to a minimum of 6 SIP instalments of Rs. 1000/- each).Redemption: If the holding is less than Rs. 1000 or 100 units, after processing the redemption request, the entire amount/units will be redeemed from the Scheme






Monthly (Monday preceding the last Thursday of the month)Dividend Policy


Last 1 year

Last 3 years

Last 5 years

Since Inception

3.69

6.62

-

6.40

4.38

6.90

-

7.16

Kotak Equity Arbitrage Fund CRISIL Liquid Fund Index

Performance of the Scheme (as on March 31, 2010)

Absolute Returns (%) for each financial year for the last 4 years

Expenses of theScheme

Entry Load: NilExit Load: For redemptions / switch outs (including SIP/STP) within 182 days from the date of allotment of units, irrespective of the amount of investment: 0.50%

(i) Load Structure



Waiver of Load for Direct Applications: Not applicable. Please refer to page 11 for details.

Tax Treatment for the investors: Investor is advised to refer to the details in the Statement of Additional Information and also independently refer to his tax advisor.Daily Net Asset Value (NAV) Publication:For Investor Grievances please contact: Please refer to page 1 for details.Unitholders' Information: Please refer page 12 for details.


Actual expenses for the previous Financial Year ended March 31, 2009 (Audited): P. A.1.10%

AUM: Rs. 576.13 crores. Folio: 1736AUM and Folio

September 29, 2005Inception Date



Continuous Offer

7

Kotak EquityArbitrage Fund*

CRISIL LiquidFund Index

8 . 2

9 9 . 3

1

7 . 4

0

4 . 4

6

6 . 4

6 7 . 3

6 8

. 7 8

3 . 5

4

0.00

1.002.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

2006- 07 2007-08 2008- 09 2009-10

R e t u r n s

Indicative Allocation Risk Profile

65% to 90% Low to medium

10% to 35% Low

a. The asset allocation under normal circumstances will be as follows:

Investments

Equity and equity related instruments including derivatives

Debt and money market instruments including margin money deployed in derivatives transactions **

b. The asset allocation under defensive circumstances will be as follows:

Note: (i) ** Debt securities / instruments are deemed to include securitized debt and investment in securitized debt will not exceed 50% of the debt portion of the scheme(ii) Defensive circumstances are when the arbitrage opportunities in the market place are negligible or returns are lower than alternative investment opportunities as per allocation pattern.The allocation under defensive considerations will be made keeping in view the interest of the unitholders.

0% to 65% Low to medium

35% to 100% Low

Equity and equity related instruments including derivativesDebt and money market instruments including margin money deployed in derivatives transactions **

Note: (i) ** Debt securities / instruments are deemed to include securitized debt and investment in securitized debt will not exceed 50% of the debt portion of the scheme.(ii) The asset allocation as given under normal circumstances is indicative and may vary according to circumstances at the sole discretion of the Fund Manager. Review and rebalancing will beconducted when the asset allocation falls outside the r ange indicated above, within a reasonable period of time.


8/20

INVESTMENT STRATEGIES & RISK MEASURESKotak 30:Investment StrategyThe investment strategy of the AMC is directed to investing in s tocks, which, in the opinion ofthe Investment Manager, are priced at a material discount to their intrinsic value. Such intrinsicvalue is a function of both past performance and future growth prospects. The process ofdiscovering the intrinsic value is through in-house research supplemented by research availablefrom other sources.

For selecting particular stocks as well as determining the potential value of such stocks, theAMC is guided, inter alia, by one or more of the following considerations:

1. The financial strength of the companies, as indicated by well recognised financialparameters;

2. Reputation of the management and track record;3. Companies that are relatively less prone to recessions or cycles, either because of the nature

of their businesses or superior strategies followed by their management;4. Companies which pursue a strategy to build strong brands for their products or servicesand those which are capable of building strong franchises; and

5. Market liquidity of the stock.

Risk is managed by adequate diversification by spreading investments over a range ofindustries.

The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities is made with the prior approval of the Board of the AMC,provided the investment is in terms of the parameters approved by the Board of the Trustee.Where the proposed investment is not within the parameters as mentioned above, approval ofthe Boards of both the AMC and the Trustee is taken before making the investment.

To reduce the risk of the portfolio, the Scheme also uses various derivative and hedgingproducts from time to time, in the manner permitted by SEBI.

Subject to the maximum amount permitted from time to time, the Scheme may invest inGDRs/ADRs, in the manner allowed by SEBI/RBI. Such investments will be in conformity with theinvestment objective of the Scheme and the guidelines and Regulations prevailing at the time.

Risk control measures for investment strategy

The fund will comply with the prescribed SEBI limits on exposure. Risk is monitored andnecessary action would be taken on the portfolio if required. Attribution analysis is done tomonitor the under or overperformance vis a vis the benchmark and the reasons for the same..

Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored with respect to the benchmark and peer set.

Risk mitigation measures for managing liquidityThe scheme predominantly invests in large cap stocks which are actively traded and therebyliquid. The fund manager may also keep some portion of the portfolio in debt and moneymarket instruments and/or cash within the specified asset allocation framework for the purposeof meeting redemptions. The liquidity would be monitored and necessary action would betaken on the portfolio if required.Stock turnover is monitored at regular intervals. Thedebt/money market instruments that are invested by the fund will have a short term duration.

Kotak Opportunities:Investment StrategyThe Scheme will invest across sectors based on performance and potential of companies withinthe sectors. It will invest in a mix of large cap and mid cap stocks. This portfolio diversification iswith a view to derive superior performance compared to other diversified equity schemes.

Allocations between asset classes as well as the portfolio mix between large cap and mid capstocks will be driven by the overall macro economic situation. The portfolio construction will bebased on bottom up investment ideas.

The restructuring witnessed amongst the Indian companies over the past decade has deepenedand spread across sectors. Apart from the large companies, a lot of mid cap companies haverestructured and become leaner.

As the economic growth gathers momentum and becomes broad based it will benefit the midcap companies. This will throw large number of opportunities in the mid cap universe. Alongwith the fact that mid cap stocks are generally available at lower valuations, they can alsoprovide higher growth rates.

The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities would be made with the prior approval of the Board of theAMC, provided the investment is in terms of the parameters approved by the Board of theTrustee. Where the proposed investment is not within the parameters as mentioned above,approval of the Boards of both the AMC and the Trustee would be taken before making theinvestment.

The Scheme may invest in GDRs/ADRs, in the manner permitted by SEBI/RBI. Such investmentswill be in conformity with the investment objective of the Scheme and the prevailing guidelinesand Regulations. The Scheme may also use various derivative and hedging products from time

to time, in a manner permitted by SEBI to reduce the risk of the portfolio.Risk control measures for investment strategyThe fund will comply with the prescribed SEBI limits on exposure. Risk is monitored andnecessary action would be taken on the portfolio if required. Attribution analysis is done tomonitor the under or overperformance vis a vis the benchmark and the reasons for the same.

Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored on with respect to the benchmark and peer set

Risk mitigation measures for managing liquidityA significant part of the scheme is invested in large cap stocks which are actively traded andthereby liquid. The fund manager may also keep some portion of the portfolio in debt andmoney market instruments and/or cash within the specified asset allocation framework for thepurpose of meeting redemptions. The liquidity would be monitored and necessary actionwould be taken on the portfolio if required. Stock turnover is monitored at regular intervals. Thedebt/money market instruments that are invested by the fund will have a short term duration.

Kotak Tax Saver:Investment StrategyThe investment polices shall be in accordance with SEBI (Mutual Funds) Regulations, 1996 andrules and guidelines for ELSS - 1992 scheme (including any modification to them) and withinthe following guidelines:1. The funds collected under the scheme shall be invested in equities, cumulative convertible

preference shares and fully convertible debentures and bonds of companies. Investmentmay also be made in partly convertible issues of debentures and bonds including thoseissued on rights basis subject to the condition that, as far as possible, the non-convertibleportion of the debentures so acquired or subscribed, shall be disinvested within a period of12 months.

2. It shall be ensured that funds of the scheme shall remain invested to the extent of at least80 percent in securities specified in clause (1). The scheme shall strive to invest their funds inthe manner stated above within a period of 6 months from the date of closure. In

exceptional circumstances, this requirement may be dispensed with by the scheme, inorder that the interests of the investors are protected.

3. Pending investment of funds of the scheme in the required manner, the scheme may investthe funds in short-term money market instruments or other liquid instruments or both.After three years of the date of allotment of the units, the scheme may hold upto 20percent of net assets of the plan in short-term money market instruments and other liquidinstruments to enable them to redeem investment of those unitholders who would seek totender the units for repurchase.

The scheme will endeavour to generate superior return by investing in equity and equity linkedinstruments across the market capitalisations. The scheme will use bottom-up stock selection tobuild its portfolio. Risk will be managed by adequate diversification by spreading investmentsover a range of industries and companies.

The investment strategy of the AMC is directed to investing in stocks, which, in the opinion ofthe Investment Manager, are priced at a material discount to their intrinsic value. Such intrinsicvalue is a function of both past performance and future growth prospects. The process ofdiscovering the intrinsic value is through in-house research supplemented by research availablefrom other sources.




of their businesses or superior strategies followed by their management;4. Companies which pursue a strategy to build strong brands for their products or services

and those which are capable of building strong franchises; and5. Market liquidity of the stock.

The Scheme is not restrained from investing in listed/unlisted and/or rated/unrated debt ormoney market securities, provided the investments are within the limits indicated in theInvestment Pattern Table. Investment in unrated debt securities is made with the prior approvalof the Board of the AMC, provided the investment is in terms of the parameters approved by theBoard of the Trustee. Where the proposed investment is not within the parameters asmentioned above, approval of the Boards of both the AMC and the Trustee is taken beforemaking the investment.

The Scheme may also use various derivatives from time to time, in a manner permitted by SEBIto reduce the risk of the portfolio.

Risk control measures for investment strategyThe fund will comply with the prescribed SEBI limits on exposure. Risk is monitored andnecessary action would be taken on the portfolio if required. Attribution analysis is done tomonitor the under or overperformance vis a vis the benchmark and the reasons for the same.

Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored with respect to the benchmark and peer set

Risk mitigation measures for managing liquidityA lock-in period for the scheme enables better liquidity management. A significant part of thescheme is invested in large cap stocks which are actively traded and thereby liquid. The fundmanager may also keep some portion of the portfolio in debt and money market instrumentsand/or cash within the specified asset allocation framework for the purpose of meetingredemptions. The liquidity would be monitored and necessary action would be taken on theportfolio if required. Stock turnover is monitored at regular intervals. The debt/money marketinstruments that are invested by the fund will have a short term duration.

Kotak Midcap:Investment StrategyThe Scheme will invest predominantly (atleast 65%) in midcap stocks, which in the opinion ofthe Fund Manager offers above average earnings, growth potential and attractive valuation.

To pursue its investment objective, the Fund Manager has the discretion to invest in other thanmid cap stocks (stocks, which have a market capitalisation of above or below the marketcapitalisation range of midcap stocks) and related derivatives. On defensive consideration, theScheme may also invest in debt and money market instruments.

In order to build a diversified portfolio of investments, the Scheme will make investments acrosssectors. The Scheme will normally invest in companies, which have the followingcharacteristics: Proven products and services, Record of above average earnings growth and have potential to sustain such growth, Stock prices that appear to undervalue their growth prospects, and Companies, which are in their early and more dynamic stage of the life cycle, but are no

more considered new or emerging.

The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities would be made with the prior approval of the Board of theAMC provided the investment is in terms of the parameters approved by the Board of theTrustee. Where the proposed investment is not within the parameters as mentioned above,approval of the Boards of both the AMC and the Trustee would be taken before making theinvestment.

Subject to the maximum amount permitted from time to time, the Scheme may invest inADRs/GDRs or other offshore securities, in the manner allowed by SEBI/RBI, provided suchinvestments are in conformity with the investment objectives of the Scheme and the prevailingguidelines and Regulations. The Scheme may also use various derivative and hedging productsfrom time to time, in the manner permitted by SEBI.

To avoid duplication of portfolios and to reduce expenses the Scheme may invest in any otherscheme of the Fund to the extent permitted by the Regulations. In such an event, as per theRegulations, the AMC cannot charge management fees on the amounts of the Schemes soinvested.

Risk control measures for investment strategyThe fund will comply with the prescribed SEBI limits on exposure. Risk is monitored at andnecessary action would be taken on the portfolio if required. Attribution analysis is done tomonitor the under or overperformance vis a vis the benchmark and the reasons for the same.

Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored with respect to the benchmark and peer set

Risk mitigation measures for managing liquiditySince this is a mid cap oriented fund, liquidity risk may be higher than schemes which have alarger proportion of large cap stocks. The fund manager may also keep some portion of theportfolio in debt and money market instruments, large cap stocks and/or cash within thespecified asset allocation framework for the purpose of meeting redemptions. The liquiditywould be monitored and necessary action would be taken on the portfolio if required. Stockturnover is monitored at regular intervals. The debt/money market instruments that areinvested by the fund will have a short term duration.

8


9/20

INVESTMENT STRATEGIES & RISK MEASURES (cont.)Kotak Balance:Investment StrategyBalancing Equity and Debt Risk:The investment strategy is aimed at exploiting the potential for capital appreciation of equityand the stable returns of debt while balancing the risks of equity with the comparative safety ofdebt. Emphasis is given to choosing securities, which, in the opinion of the Fund Manager, areless prone to market risk and default risk, while bearing in mind the liquidity needs arising out ofthe open-ended nature of the Scheme.

Equity Portion: The investment strategy of the AMC is directed to investing in stocks, which, inthe opinion of the Fund Manager, are priced at a material discount to their intrinsic value andare less prone to market risk. Such intrinsic value is a function of both past performance andfuture growth prospects. The process of discovering the intrinsic value is through in-houseresearch, supplemented by research available from other sources. For selecting particular stocksas well as determining the potential value of such stocks, the AMC will be guided, inter alia, bythe following considerations:(i) The financial strength of the companies, as indicated by well recognised financial

parameters;(ii) The reputation of the management and its track record;(iii) Companies that are relatively less prone to recessions or cycles, either because of the nature

of their businesses or superior strategies followed by their management;(iv) Companies which are generally believed to be a good credit risk;(v) Companies which pursue a strategy to build strong brands for their products or services

and those which are capable of building strong franchises; and(vi) The market capitalisation on, volatility and liquidity of the stock.

Risk is distributed by spreading investments over a range of industries/sectors.

Debt Portion: The Scheme may invest in listed/unlisted and/or rated/unrated debt or moneymarket instruments/securities, Gilts/Government Securities, securities issued/guaranteed by theCentral/State Governments, securities issued by public sector companies, financial institutionsand/or money market instruments such as commercial paper, certificates of deposit, permittedsecurities under a repo agreement etc., provided the investment is within the limits indicated inthe Investment Pattern Table. Investment in unrated debt securities is made with the priorapproval of the Board of the AMC, provided the investment is in terms of the parametersapproved by the Board of the Trustee. Where the proposed investment is not within theparameters as mentioned above, approval of the Boards of both the AMC and the Trustee istaken before making the investment. The maturity profile of debt instruments is selected in

accordance with the Fund Manager's view regarding market conditions, interest rate outlookand stability of rating.

The Scheme may invest in call money / term money market in terms of RBI guidelines in thisrespect.

To avoid duplication of portfolios and to reduce expenses, the Scheme may invest in any otherscheme of the Fund to the extent permitted by the Regulations. In such an event, the AMCcannot charge management fees on the amounts of the Schemes so invested, unless permittedby the Regulations.


Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored on with respect to the benchmark and peer set.

Risk mitigation measures for managing liquidityThe fund invests a significant part of its portfolio in debt and money market instruments whichare actively traded and thereby liquid for the purpose of meeting redemptions. The liquiditywould be monitored and necessary action would be taken on the portfolio if required. Stockturnover is monitored at regular intervals The debt/money market instruments that are investedby the fund will contain an adequate portion to help manage the liquidity needs of the fund.

Kotak Lifestyle:Investment StrategyTo achieve the investment objective, the scheme will invest in equity and equity linkedinstruments across the market irrespective of capitalisation. The scheme will use bottom-upstock selection and invest across industries and companies, which are expected to benefit fromthe rising household spending on consumer goods and services in India.



The financial strength of the companies, as indicated by well recognised financial parameters;a) Reputation of the management and track record;b) Companies that are relatively less prone to recessions or cycles, either because of the nature

of their businesses or superior strategies followed by their management;c) Companies which pursue a strategy to build strong brands for their products or servicesand those which are capable of building strong franchises; and

d) Market liquidity of the stock.

In addition to above, our fund management backed by proficient research team shall constantlystrive to identify companies, which may benefit directly from rising consumerism and changinglifestyle in India. In an endeavour to preserve capital in bearish market conditions, the FundManager may invest in money or debt market securities upto 35% of the portfolio.The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities is made with the prior approval of the Board of the AMC,provided the investment is in terms of the parameters approved by the Board of the Trustee.Where the proposed investment is not within the parameters as mentioned above, approval ofthe Boards of both the AMC and the Trustee is taken before making the investment.

To reduce the risk of the portfolio, the Scheme may also use various derivative and hedgingproducts from time to time, in the manner permitted by SEBI.


Subject to the maximum amount permitted from time to time, the Scheme may invest inGDRs/ADRs and foreign securities in the manner allowed by SEBI/RBI. Such investments will bein conformity with the investment objective of the Scheme and the guidelines and Regulationsprevailing at the time.

Risk control measures for investment strategyThe fund aims to invest in equity and equity related securities which are likely to benefit bychanging lifestyles due to change in demographics, growing Indian middle class and risingconsumerism.The fund will comply with the prescribed SEBI limits on exposure. Risk ismonitored and necessary action would be taken on the portfolio if required. Attribution analysisis done to monitor the under or overperformance vis a vis the benchmark and the reasons forthe same.



Kotak Contra:Investment StrategyWhile investing in stocks of companies across the range of market capitalisation, the Schemewill follow a bottom up approach to identify the universe of companies. Bottom up approachde-emphasizes the relative significance of economic and market cycles, focusing instead on theanalysis of individual stocks.

Of the universe so defined, the Scheme's stock picking will broadly be guided by the followingcriteria: The companies which,i) Are fundamentally sound and have long term growth potential, andii) Have attractive valuations, which is the difference between the estimated intrinsic value of

the business and its current market price.

While estimating the intrinsic value of a company, some or all of the following factors will beconsidered:The future growth potential of the company, acquisition values of similar companies incomparable times, its range of products and services, its competitive position in the industry,strength of its management, its financials, etc.

The attractive valuation could be a result of an early identification of positive fundamentalchanges in the underlying company, such as significant cost cutting, launch of new products,expanding distribution network, consolidation in the industry, etc.

In an endeavour to preserve capital in bearish market conditions, the Fund Manager may investin money or debt market securities upto 35% of the portfolio.

The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities is made with the prior approval of the Board of the AMC,provided the investment is in terms of the parameters approved by the Board of the Trustee.Where the proposed investment is not within the parameters as mentioned above, approval ofthe Boards of both the AMC and the Trustee is taken before making the investment.

To reduce the risk of the portfolio, the Scheme may also use various derivative and hedgingproducts from time to time, in the manner permitted by SEBI.


Subject to the maximum amount permitted from time to time, the Scheme may invest inGDRs/ADRs, in the manner allowed by SEBI/RBI. Such investments will be in conformity with theinvestment objectives of the Scheme and the guidelines and Regulations prevailing at the time.




Kotak Equity FOF:Investment StrategyThe Scheme will invest predominantly in open-ended diversified equity schemes of MutualFunds, which are registered with SEBI.

The Fund Manager will normally invest not more than 25% of scheme's equity allocation in oneor more equity scheme(s) of KMMF subject to SEBI regulations.

A combination of quantitative filters and qualitative judgment will be used in fund selection.

Quantitative analysis: Past performance of funds will be evaluated based on parameters likeconsistency in generating better risk and style adjusted returns, fund volatility, etc. The fundswill be ranked based on combination of above listed parameters and best performing funds willbe further subjected to qualitative judgment process described below.

Qualitative judgment: The Fund-Of-Funds manager, if considered necessary, may interact withthe fund management teams of prospective/ current underlying funds to assess them onparameters like consistency and meritsdemerits of their investment style (cap, sector,growth/value bias), research depth, clarity in decision making process and transparency indisclosures.

Hence, only the funds which pass through both quantitative and qualitative filters describedabove shall be included as underlying funds in the Kotak Equity FOF.

Pending deployment of the funds of the Scheme in terms of the investment objective, the Fundcan invest the funds of the Scheme in short t erm deposits of scheduled commercial banks as perthe guidelines given in SEBI Circular no. SEBI/IMD/CIR No. 1/91171/07 dated April 16, 2007.

Risk control measures for investment strategyThe fund will comply with the prescribed SEBI limits on exposure. Risk is monitored andnecessary action would be taken on the portfolio if required. Funds to be invested in areidentified based on evaluation of quantitative and qualitative parameters.Risk mitigation measures for portfolio volatilityKotak Equity FOF invests in multiple equity schemes thereby ensuring greater diversification atthe stock, sector and investment style level. These underlying schemes are in-turn identifiedusing quantitative parameters which involve portfolio volatility as one of the criteria.Accordingly schemes with higher risk adjusted returns are identified.

Risk mitigation measures for managing liquidityThe scheme invests in open ended equity schemes which offer liquidity on a daily basis. Certainqualitative parameters like size and track record of the fund are used to identify the underlyingschemes. Additionally, the fund managers of the underlying schemes may undertake liquiditymonitoring at the respective portfolio level.

9


10/20

INVESTMENT STRATEGIES & RISK MEASURES (cont.)Kotak Select Focus Fund:Investment StrategyTo achieve the investment objective, the scheme will invest in equity and equity linkedinstruments across companies irrespective of their market capitalisations. However, the FundManager will generally invest in a few selected sectors, which in the opinion of the fundmanager have potential to grow. To that extent it would be a concentrated strategy butmanaged actively. Moreover there will not be any restrictions in terms of investment in a singlesector or cap on floor of investment per sector. There will be concentration in the portfolio oncertain select sectors, which are in the opinion of the fund manager expected to do well.

The selection of sectors would be driven primarily by the growth prospects and valuations of thebusinesses over a medium to long term as per the discretion of the fund manager. The fundmanager broadly follows the sector classification suggested by AMFI; however, the sectorclassification of an individual stock will be decided by the fund manager as per his/herunderstanding about the growth driver for that stock. For example, a company classified underconsumer durables may be reclassified into real estate sector by the fund manager, if in theopinion of fund manager, the stock is doing and/or expected to do well because of its otherrevenues arising out of real estate transactions. The Sectoral focus of the scheme is restricted toinvestment in equity and equity related instruments and does not extend to debt securities. Thetotal number of sectors focussed will be kept around 50% of the sectors represented in S&PCNX Nifty index; however the sectors/stocks selected may or may not be within the sectorsrepresented in S&P CNX Nifty index.

The sectors represented in S&P CNX Nifty index as on the last date of the previous quarter will beconsidered for selecting the sectors to be focused during the quarter. The asset allocationacross the select sectors may be rebalanced in thirty days from the end of the quarter.





of their businesses or superior strategies followed by their management;4. Companies which pursue a strategy to build strong brands for their products or services

and those which are capable of building strong franchises; and5. Market liquidity of the stock.

In an endeavour to preserve capital in bearish market conditions, the Fund Manager may investin money or debt market securities upto 35% of the portfolio.

The Scheme may invest in listed/unlisted and/or rated/unrated debt or money market securities,provided the investments are within the limits indicated in the Investment Pattern Table.Investment in unrated debt securities is made with the prior approval of the Board of the AMC,provided the investment is in terms of the parameters approved by the Board of the Trustee.Where the proposed investment is not within the parameters as mentioned above but withinthe limits prescribed under SEBI mutual fund regulations, approval of the Boards of both theAMC and the Trustee is taken before making the investment.

To reduce the risk of the portfolio, the Scheme may also use various derivative and hedgingproducts from time to time like stock specific and/or index derivatives for hedging andrebalancing purposes, in the manner permitted by SEBI.


Risk control measures for investment strategyThe fund invests in a few select sectors which in the opinion of the fund manager are expectedto grow. The selection of the sectors is primarily driven by growth prospects and valuations ofthe business over the medium to long term. The fund will comply with the prescribed SEBI limitson exposure. Risk is monitored and necessary action would be taken on the portfolio if required.Attribution analysis is done to monitor the under or overperformance vis a vis the benchmarkand the reasons for the same.

Risk mitigation measures for portfolio volatilityThe overall volatility of the portfolio would be maintained in line with the objective of thescheme. The portfolio would be adequately diversified to mitigate volatility. Volatility would bemonitored on with respect to the benchmark and peer set.


Kotak Emerging Equity Scheme:Investment StrategyThe scheme will use bottom-up stock selection and invest across sectors and companies. Toachieve the investment objective, the scheme will p

kotak mf appln

Documents