The new fund offer (NFO) opened on June 15 and will close on June 29.
Specialised Investment Funds are a new category of investment products introduced by SEBI to bridge the gap between traditional mutual funds and portfolio management services (PMS) and alternative investment funds (AIFs).
The framework allows fund houses greater flexibility in portfolio construction compared with conventional mutual fund schemes, while remaining within prescribed regulatory limits.
According to Kotak Mutual Fund, the scheme will follow a hybrid long-short strategy, investing across equities, arbitrage opportunities and select derivative strategies. The fund aims to dynamically manage net equity exposure and seeks to reduce portfolio drawdowns during volatile market conditions through a combination of long positions, permitted short exposures and arbitrage strategies.
The launch comes as asset managers prepare to introduce products under the new SIF framework, which is expected to expand the range of investment strategies available to investors seeking more sophisticated offerings than traditional mutual funds.
Kotak Mutual Fund said the strategy is designed with an emphasis on risk management and disciplined portfolio construction. However, the asset manager noted that there is no assurance that the investment objectives will be achieved or that the strategy will deliver favourable or consistent outcomes across market cycles.
The fund house also highlighted that investments in Specialised Investment Funds involve relatively higher risks, including potential loss of capital, liquidity risks and market volatility, and may be suitable for investors who understand the associated features and risks.
