FUNDS IN FOCUS AUGUST

Transcription

1 FUNDS IN FOCUS AUGUST 31, 2017

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3 Kotak Equity Arbitrage Scheme Facts Structure An Open Ended Equity Growth Scheme Month end AUM* (as on 31 Aug 2017) `8, crs Monthly Average AUM* `8, crs NAV (as on 31 Aug 2017) Bimonthly Dividend ` Bimonthly Dividend Direct ` Dividend ` Dividend Direct ` Growth ` Growth Direct ` Fortnightly Dividend ` Fortnightly Dividend Direct ` Launch Date th 29 September 2005 Benchmark Nifty 50 Arbitrage Index (w.e.f 1 October 2016) Min. Initial Inv. `5000 Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 0.47% Beta^ 0.46 Sharpe^ 1.54 Portfolio Turnover % *Source: MFI Explorer. ^ as on 31 Aug, Source: Value Research. Load Structure Entry Load: Nil Exit Load: I) For redemptions/switch outs (including SIP/STP) within 30 days from the date of allotment of units, irrespective of the amount of invement: 0.25% II) For redemptions/switch outs (including SIP/STP) after 30 days from the date of allotment of units, irrespective of the amount of invement: Nil Note - Any exit load charged (net off Service Tax, if any ) shall be credited back to the Scheme. About Kotak Equity Arbitrage Enter into simultaneous transactions of a long position in cash and exactly off-setting short position in futures Equity position is completely hedged at trade initiation. Towards the expiry or before the expiry of the derivatives contract, the positions are reversed or rolled over (if spread is available for next month) Equity Market Brief GST landmark reform is now implemented. While there might be some near-term issues in implementing, the longer term benefits are transformative. Mo lied players will benefit, as they form the organised part of the economy. Corporate earnings in few sectors like FMCG, home building, durables, fashion etc are showing these transitional impact of GST implementation, even as mo company management view this as a rong opportunity for their companies. Corporate earnings are likely to pick up in the second half of FY18. India to benefit from such reforms which encourages formalisation of the economy in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Volatility across global equities is on lower side. Global events Fed hiking, Chinese currency depreciation, geopolitical events to add to near-term volatility. Time in the market more important than timing the market after a long period of lower volatility, markets volatility may move up. Portfolio Action The roll spread (annualized and adjued for fresh arbitrage positions initiated) on the arbitrage book is approximately 6.3%. Around 61% of the corpus is deployed into arbitrage trades and remaining in FDs, debt and money market inruments. With both the Liquid fund returns and the FD returns falling sharply, the returns from the debt portion are also moving down. The inveors have seen a decent run of returns from this category in the pa few months. As the corpus of the category keeps on increasing, it is bound to put pressure on the spreads. There is no way one can predict what would be the maximum corpus that the market can absorb but one thing is for sure that as the corpus of the category will increase further, the returns are bound to get impacted. View going forward: We believe that as long as the bullishness in the equity markets remains, the arbitrage spreads will be buoyant. But at the same time, as the corpus of the indury keeps on increasing, it is going to put a downward pressure on the spreads. Though we admit that we don t know the tipping point when the increased corpus will art impacting the spreads adversely, we would ill urge the inveors not to extrapolate the returns of the pa few months into the future. Sector Allocation as on 31 Aug, 2017 CBLO & Term Deposits & Rev.Repo Mutual Fund Units 9.52 Finance 9.08 Banks 8.17 Commercial Paper (CP)/Certificate of Deposits (CD) 5.79 Pharmaceuticals 5.78 Debentures and Bonds 3.54 Software 3.51 Auto Ancillaries 3.50 Cement 3.46 Others Units issued on reinvement of dividends shall not be subject to entry and exit load. 1

4 Kotak Equity Arbitrage Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Fortnightly Plan - Dividend Option Aug Aug Jul Jul Jul Jun Jun May May Apr Bimonthly Plan - Dividend Option Jul May Mar Jan Nov Sep Jul May Mar About Kotak Mutual Fund Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. To know more Call : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Disclaimer Kotak Equity Arbitrage is an open-ended equity growth scheme. Invement Objective: To generate capital appreciation and income by predominantly inveing in arbitrage opportunities in the cash and derivatives segment of the equity market, and by inveing the balance in debt and money market inruments. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com Top 10 Companies as on 31 Aug, 2017 Kotak Equity Arbitrage* (Div) Performance (%) as on 31 Augu, 2017 Date HDFC Ltd. CRISIL AAA 4.84% LIC Housing Finance Ltd. CRISIL AAA 4.25% Infosys Ltd. Software 3.49% Kotak Mahindra Prime Ltd. CRISIL AAA 3.36% Indiabulls Housing Finance Limited ICRA AAA 2.28% Kotak Floater Short Term Direct Growth Mutual Fund Units 2.24% State Bank Of India Banks 2.16% Sun Pharmaceuticals Induries Ltd. Pharmaceuticals 2.03% Vedanta Ltd. Non - Ferrous Metals 1.66% Bank Of Baroda Banks 1.35% Kotak Equity Arbitrage Scheme Nifty 50 Nifty 50 Current Value of Standard Invement Returns Arbitrage ## (%) of `10000 in the (%) ^ Index # (%) Scheme ( `) Benchmark # ( `) Additional Benchmark ## ( `) Since Inception 7.62 NA ,007 NA 37,982 La 1 Year La 3 Years La 5 Years Scheme Inception date is 29/09/2005. Mr. Deepak Gupta has been managing the fund since 24/02/2011. Different plans have different expense ructure. The performance details provided herein are of regular plan. ^Pa performance may or may not be suained in future.*all payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. # Name of Scheme Benchmark. ## Name of Additional Benchmark. Please refer page no. 21 for top 3 and bottom 3 schemes managed by Mr. Deepak Gupta. LOW Riskometer Moderate Inveors underand that their principal will be at moderately low risk HIGH This product is suitable for inveors who are seeking*: Income from arbitrage opportunities in the equity market Invement in arbitrage opportunities in the cash & derivatives segment of the equity market. * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. 2

5 Kotak Equity Savings Fund Scheme Facts Structure An Open Ended Equity Scheme Month end AUM* (as on 31 Aug 2017) ` crs Monthly Average AUM* ` crs NAV (as on 31 Aug 2017) Direct Growth ` Growth ` Quarterly Dividend ` Direct Quarterly Dividend ` Monthly Dividend ` Direct Monthly Dividend ` Launch Date th 13 October 2014 Benchmark 75% of Nifty 50 Arbitrage Index & 25% in Nifty 50 (w.e.f. Nov 01, 2016) Min. Initial Inv. ` 5000 & in multiples of `1 Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 3.35% Beta^ 0.95 Sharpe^ 0.72 Portfolio Turnover % *Source: MFI Explorer. ^as on 31 Aug, Source: Value Research. Load Structure Entry Load: Nil Exit Load: i) For redemption / switch out of upto 10% of the initial invement amount (limit) purchased or switched in within 1 year from the date of allotment: Nil. ii) If units redeemed or switched out are in excess of the limit within 1 year from the date of allotment: 1%. iii) If units are redeemed or switched out on or after 1 year from the date of allotment: Nil. Any exit load charged (net off Service Tax, if any) shall be credited back to the respective Scheme. Units issued on reinvement of dividends shall not be subject to entry and exit load. About Kotak Equity Savings Fund It is an open-ended equity scheme which aims to generate income from cash- futures arbitrage positions and at the same time allows you to participate in the equity market growth moderately. Benefits of Kotak Equity Savings Fund: Income -Aims to provide income from arbitrage opportunities in cash & derivatives segment of the equity market Growth Potential - Potential for growth in the long term through moderate exposure in directional equity (15%25% of net assets) Conant Mix Approach- - The unhedged equity portion has to be maintained in a small range (15%- 25%), hence the fund manager has to sell in a rising equity market and buy more in a falling equity market to adopt a conant mix approach. Tax efficiency - The Fund is treated similar to equity funds for tax purposes.* * Please consult your tax adviser with respect to the specific tax implications. Equity Market Brief GST landmark reform is now implemented. While there might be some near-term issues in implementing, the longer term benefits are transformative. Mo lied players will benefit, as they form the organised part of the economy. Corporate earnings in few sectors like FMCG, home building, durables, fashion etc are showing these transitional impact of GST implementation, even as mo company management view this as a rong opportunity for their companies. Corporate earnings are likely to pick up in the second half of FY18. India to benefit from such reforms which encourages formalisation of the economy in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Volatility across global equities is on lower side. Global events Fed hiking, Chinese currency depreciation, geopolitical events to add to near-term volatility. Time in the market more important than timing the market after a long period of lower volatility, markets volatility may move up. Portfolio Action Directional Equity: The directional equity was around 23.00%. On the directional equity side, we have been running a conservative portfolio with a max exposure in non nifty ocks being 20% at any point in time. Remaining 80% of the directional equity continues to be in Nifty 50 ocks. Apart from this, we have been overweight on commodity oriented sectors like cement, metals and Oil & Gas. The major underweight sectors are Cap Goods, Technology and Auto. Over a period of time, the exposure to metals has been increased gradually whereas the underweight in Technology and Pharma continues. Among the defensives, utilities carries the maximum overweight. Arbitrage: The arbitrage portion continues to be managed in the same way we manage our arbitrage fund. In months, when the arbitrage opportunities provide better returns than the debt papers, we deploy more money into arbitrage trades. The benefit is that in months when the arbitrage returns are sub optimal, we can deploy a lower amount in arbitrage and ill maintain the equity taxation atus. Stocks like HDFC Bank, IDFC, Maruti, Reliance Induries, etc have yielded returns which are higher than the average of the entire arbitrage universe. We have done some merger arbitrage trades viz. CMC-TCS and Shasun-Strides in the pa. The blended annualized returns were upwards of 14% in these trades. Recently, we have done merger arbitrage trades in Geometric-HCL Tech and Cairn-Vedanta which have an expected return potential of more than 16% annualized. During the divement issue of CPSE ETF, we subscribed to the ETFs (at 5% discount) and shorted the futures of individual conituents to bag more than 5% gain within a month. After one month, we exited this trade. So, a riskless profit of absolute 5% was made within a month in this trade. Debt: We have been managing the debt portion in a very conservative manner till now. The term deposits which are to be placed with the exchange for taking exposure in derivatives generally have a tenure of 1 year. On the debt side, we prefer to play accrual as compared to duration. A bulk of exposure on the debt side is into papers with a residual maturity (or time to put option) of 2-3 years. A significant portion is also inveed into our own Liquid Fund. The benefit of inveing in Liquid is that in case the arbitrage spreads expand, we can easily move the money from liquid into arbitrage trades without worrying about the levels where the debt yields are quoting at that point in time. 3

6 Kotak Equity Savings Fund About Kotak Mutual Fund Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. To know more Call : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Disclaimer Kotak Equity Savings Fund, an Open ended equity scheme. Invement objective: of the scheme is to generate capital appreciation and income by predominantly inveing in arbitrage opportunities in the cash and derivatives segment of the equity market, and enhance returns with a moderate exposure in equity & equity related inruments.there is no assurance or guarantee that the invement objective of the scheme will be achieved. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Quaterly Dividend Option Jun Mar Dec Sep Jun Mar Portfolio Detail Kotak Equity Savings Fund * Performance (%) as on 31 Augu, 2017 Date Kotak Equity Savings Fund The scheme has been in exience for less than 3 & 5 years Different plans have different expense ructure. The performance details provided herein are of regular plan. ^Pa performance may or may not be suained in future.*all payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. # Name of Scheme Benchmark. ## Name of Additional Benchmark.Please refer page no for top 3 and bottom 3 schemes managed by Mr. Deepak Gupta & Mr. Abhishek Bisen. LOW Riskometer Moderate Inveors underand that their principal will be at moderately high risk HIGH Scheme 75% Nifty 50 Nifty Current Value of Standard Invement Returns Arbitrage Index 50 of ` in the (%) ^ 25% Nifty 50 ## (%) Scheme ( `) Benchmark Additional # (%) # ( `) Benchmark ## ( `) Since Inception ,873 12,214 12,579 La 1 Year % of Net assets Unhedged Position Cash Futures Arbitrage Debt Inruments* Cash and Cash equivalent and Net Current Asset 8.41 Total *Debt Inruments includes redeemable preference shares Scheme Inception date is 13/10/2014. Mr. Deepak Gupta has been managing the fund since 13/10/2014. Mr. Abhishek Bisen has been managing the fund since 13/10/2014. This product is suitable for inveors who are seeking*: Income from arbitrage opportunities in the equity market & long term capital growth Invement predominantly in arbitrage opportunities in the cash & derivatives segment of the equity market and equity & equity related securities * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. 4

7 Kotak 50 Scheme Facts Structure An Open Ended Equity Scheme Month end AUM* (as on 31 Aug 2017) `1, crs Monthly Average AUM* `1, crs NAV (as on 31 Aug 2017) Dividend ` Direct Dividend ` Growth ` Direct Growth ` Launch Date 29th December 1998 Benchmark Nifty 50 Min. Initial Inv. `5000 Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 13.45% Beta^ 0.98 Sharpe^ 0.47 Portfolio Turnover 59.76% *Source: MFI Explorer. ^ as on Research. 31 Aug, Source: Value Market Cap. % Large cap Midcap Cash 2.63 Source: KPAX (internal syem). Market definition used is market capitalisation of the 100th large scrip (on the bases of market capitalisation) is the cutoff to determine the large cap and midcap segment. Load Structure Entry Load: Nil Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of invement:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of invement: NIL Any exit load charged (net off Service Tax, if any) shall be credited back to the respective Scheme. Units issued on reinvement of dividends shall not be subject to entry and exit load About Kotak 50 Kotak 50 mainly inves in companies with large market capitalization segment across various sectors. The schemes endeavors to identify companies that are relatively able in comparison to the broader market and endeavors to select ocks based on financial rength of companies, management rategies and reputation, track record and liquidity. Equity Market Brief GST landmark reform is now implemented. While there might be some near-term issues in implementing, the longer term benefits are transformative. Mo lied players will benefit, as they form the organised part of the economy. Corporate earnings in few sectors like FMCG, home building, durables, fashion etc are showing these transitional impact of GST implementation, even as mo company management view this as a rong opportunity for their companies. Corporate earnings are likely to pick up in the second half of FY18. India to benefit from such reforms which encourages formalisation of the economy in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Volatility across global equities is on lower side. Global events Fed hiking, Chinese currency depreciation, geopolitical events to add to near-term volatility. Time in the market more important than timing the market after a long period of lower volatility, markets volatility may move up. Portfolio Action We continue to be inveed in sectoral leaders, with a special emphasis of inveing in companies that will likely see improvements in return ratios and those companies which have inveed in their business as well as cut operating cos in the downturn. We remain overweight in automobiles, media, building materials and cement, while underweight commodities, telecom and IT. Within banks, we continue to be positive on retail oriented banks and within corporate banks, prefer private sector banks. During the month we added financials, oil & gas, commodities while paring some exposure to FMCG, IT, pharma, automobiles. Top 10 Sectors as on 31 Aug, 2017 Sector % Weight Underweight / Previous Change overweight Month in portfolio Portfolio Benchmark again (Portfolio % from previous (NIFTY 50) benchmark Weight) month Financial Services Energy Automobile Information Technology Consumer Goods Pharma Conruction Cement & Cement Products Indurial Manufacturing Media & Entertainment

8 Kotak 50 Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) Jun Dec Jun Jun Dec Feb Feb Feb Jan Jan Mar Feb Jan July Dec Dec Jun Nov Jan Oct Dec About Kotak Mutual Fund Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. To know more Call : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Top 10 Companies as on 31 Aug, 2017 HDFC Bank Ltd. Banks 8.62% ICICI Bank Ltd. Banks 5.83% IndusInd Bank Ltd. Banks 4.80% Reliance Induries Ltd. Petroleum Products 4.62% Hero MotoCorp Ltd. Auto 3.91% Maruti Suzuki India Limited Auto 3.90% HDFC Ltd. Finance 3.86% ITC Ltd. Consumer Non Durables 3.27% Larsen And Toubro Ltd. Conruction Project 3.21% Bharat Petroleum Corporation Ltd. Petroleum Products 2.68% Kotak 50* (Div) Performance (%) as on 31 Augu, 2017 Date Kotak 50 Dividend Scheme Nifty 50 S&P BSE Current Value of Standard Invement Returns # (%) Sensex of ` in the (%) ^ ## (%) Scheme (`) Benchmark # ( `) Additional Benchmark ## ( `) Since Inception , , ,161 La 1 Year La 3 Years La 5 Years Scheme Inception date is 29/12/1998. Mr. Harish Krishnan has been managing the fund since 01/01/2014 Different plans have different expense ructure. The performance details provided herein are of regular plan ^Pa performance may or may not be suained in future.*all payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. # Name of Scheme Benchmark. ## Name of Additional Benchmark. Please refer page no. 21 for Other schemes managed by Mr. Harish Krishnan. LOW Riskometer Moderate Inveors underand that their principal will be at moderately high risk HIGH This product is suitable for inveors who are seeking*: Long term capital growth Invement in portfolio of predominantly equity & equity related securities * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. Disclaimer Kotak 50 is an open-ended equity scheme. Invement Objective: To generate capital appreciation from a portfolio of predominantly equity related securities. The portfolio will generally comprise of equity and equity related inruments of around 50 companies which may go up to 59 companies. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com 6

9 Kotak Select Focus Scheme Facts Structure An Open Ended Equity Scheme Month end AUM* (as on 31 Aug 2017) `13, crs Monthly Average AUM* `13, crs NAV (as on 31 Aug 2017) Dividend ` Direct Dividend ` Growth ` Direct Growth ` Launch Date th 11 September 2009 Benchmark Nifty 200 Min. Initial Inv. `5000 & in multiple of `1 for purchase and for ` 0.01 for switches Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 13.97% Beta^ 1.00 Sharpe^ 0.85 Portfolio Turn over 30.23% *Source: MFI Explorer. ^ as on 31 Aug, Source: Value Research. Market Cap. % Large cap Midcap Cash 7.36 As on 31 Aug, 2017.Source: KPAX (internal syem). Market definition used is market capitalisation of the 100th large scrip (on the bases of market capitalisation) is the cutoff to determine the large cap and midcap segment. Load Structure Entry Load: Nil Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of invement:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of invement: NIL iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the respective Scheme. (applicable for all plans) iv) Units issued on reinvement of dividends shall not be subject to exit load (applicable for all plans) About Kotak Select Focus The invement objective of Kotak Select Focus scheme is to generate long term capital appreciation from a portfolio of equity and equity related securities, generally focused on select few sectors. The scheme endeavors to identify sectors that are likely to do well over the medium term and takes focus exposures to the same. There is no reriction on which type of sectors the scheme can take exposure to and the portfolio will be generally diversified at the ock level across market capitalization. The scheme is well positioned to capture various themes that are in flavour in a focused manner. Equity Market Brief GST landmark reform is now implemented. While there might be some near-term issues in implementing, the longer term benefits are transformative. Mo lied players will benefit, as they form the organised part of the economy. Corporate earnings in few sectors like FMCG, home building, durables, fashion etc are showing these transitional impact of GST implementation, even as mo company management view this as a rong opportunity for their companies. Corporate earnings are likely to pick up in the second half of FY18. India to benefit from such reforms which encourages formalisation of the economy in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Volatility across global equities is on lower side. Global events Fed hiking, Chinese currency depreciation, geopolitical events to add to near-term volatility. Time in the market more important than timing the market after a long period of lower volatility, markets volatility may move up. Portfolio Action The portfolio continues to have a pro-cyclical tilt. Domeic businesses continue dominate the portfolio as compared to export/ global businesses due to better earnings trajectory. The top overweight sectors in the fund are Cement, Oil&Gas and Capital Goods. Exposure to Oil&Gas was increased further during the month. We believe that Government s focus on reviving consumption and spending on infraructure will create positive demand scenario for our portfolio companies in medium term. Metals, Utilities and Telecom sectors are the major exclusions from the fund. The key underweight sectors continue to be IT and Pharma, wherein earnings momentum is weak and business headwinds ill persi. Allocation to large cap segment accounts for about 3/4th of the total corpus. Top Sectors as on 31 Aug, 2017 Sector % Weight Underweight / Previous Change overweight Month in portfolio Portfolio Benchmark again (Portfolio % from previous (Nifty 200) benchmark Weight) month Financial Services Energy Automobile Consumer Goods Cement & Cement Products Cash & Cash Equivalent Indurial Manufacturing Conruction

10 Kotak Select Focus About Kotak Mutual Fund Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. To know more Ccall : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Disclaimer Kotak Select Focus Fund is an open-ended equity scheme. Invement Objective: The invement objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com Dividend Hiory Top 10 Companies as on 31 Aug, 2017 HDFC Bank Ltd. Banks 6.53% Reliance Induries Ltd. Petroleum Products 5.08% Hero MotoCorp Ltd. Auto 4.32% ITC Ltd. Consumer Non Durables 4.08% HDFC Ltd. Finance 3.82% State Bank Of India Banks 3.71% IndusInd Bank Ltd. Banks 3.44% ICICI Bank Ltd. Banks 3.26% Maruti Suzuki India Limited Auto 3.14% Larsen And Toubro Ltd. Conruction Project 2.86% Kotak Select Focus* Performance (%) as on 31 Augu, 2017 Date Kotak Select Focus Fund Scheme Nifty 200 Nifty 50 Current Value of Standard Invement Returns #(%) ## (%) of ` in the (%) ^ Scheme ( `) Benchmark #( `) Additional Benchmark ## ( `) Since Inception ,822 21,501 20,536 La 1 Year La 3 Years La 5 Years Scheme Inception date is 11/09/2009. Mr. Harsha Upadhyaya has been managing the fund since 04/08/2012. Different plans have different expense ructure. The performance details provided herein are of regular plan. ^Pa performance may or may not be suained in future.*all payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. # Name of Scheme Benchmark. ## Name of Additional Benchmark. Please refer page no. 21 for schemes managed by Mr. Harsha Upadhyaya. LOW Riskometer Moderate Inveors underand that their principal will be at moderately high risk HIGH This product is suitable for inveors who are seeking*: Long term capital growth Invement in portfolio of predominantly equity & equity related securities generally focussed on a few selected sectors. * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. Date CUM Dividend Dividend NAV ( ` per unit) Sep Oct Sep Oct

11 Kotak Emerging Equity Scheme Facts Structure An Open - Ended Equity Growth Scheme Month end AUM* (as on 31 Aug 2017) `2, crs Monthly Average AUM* `2, crs NAV (as on 31 Aug 2017) Dividend ` Direct Dividend ` Growth ` Direct Growth ` Launch Date 30th March 2007 Benchmark S&P BSE Mid Small Cap Min. Initial Inv. `5000 Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 14.83% Beta^ 0.93 Sharpe^ 1.04 Portfolio Turnover 37.08% *Source: MFI Explorer. ^ as on 31 Aug, Source: Value Research. Market Cap. % Large cap Midcap Small cap 5.16 Cash 5.01 As on 31 Aug, Source: Value Research definition. Load Structure Entry Load: Nil Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of invement:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of invement: NIL Any exit load charged (net off Service Tax, if any) shall be credited back to the respective Scheme. Units issued on reinvement of dividends shall not be subject to entry and exit load. About Kotak Emerging Equity The invement objective of Kotak Emerging Equity is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by inveing predominantly in mid and small cap companies. These companies are either at their nascent or developing age and are under researched. Although relatively volatile in the short run, small and mid cap companies have the potential to deliver higher growth in the long term. Equity Market Brief GST landmark reform is now implemented. While there might be some near-term issues in implementing, the longer term benefits are transformative. Mo lied players will benefit, as they form the organised part of the economy. Corporate earnings in few sectors like FMCG, home building, durables, fashion etc are showing these transitional impact of GST implementation, even as mo company management view this as a rong opportunity for their companies. Corporate earnings are likely to pick up in the second half of FY18. India to benefit from such reforms which encourages formalisation of the economy in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Volatility across global equities is on lower side. Global events Fed hiking, Chinese currency depreciation, geopolitical events to add to near-term volatility. Time in the market more important than timing the market after a long period of lower volatility, markets volatility may move up. Portfolio Action The portfolio continues to be pro-cyclical and tilted towards economic recovery. As a result we continue to be Overweight on sectors such as Financials, cement, capital goods & engineering, auto ancillary, media, and consumer discretionary. In the short term we believe the GST implementation could be a disruptor for B2C businesses. However from a medium term perspective po GST implementation, we anticipate that the organized players would become ronger as unorganized sector would find it tough to do business in the changed environment and cede market share to more organized players and portfolio is well positioned in those sectors where there is a large portion of unorganized players. In the IT and pharma sector we continue to have ock specific approach and continue to have UW ance on both the sectors. During the month we marginally reduced weight in financials and pharma, and increased weight in consumer aples. Weight in other sectors remained largely unchanged. Po sharp run in the ocks in la 6 months, the overall view turns a little cautious on this space as valuations are above long term averages. Top 10 Sectors as on 31 Aug, 2017 Sector % Weight Underweight / Previous Change overweight Month in portfolio Portfolio Benchmark again (Portfolio % from previous S&P BSE Mid benchmark Weight) month Small Cap Index Indurial Manufacturing Financial Services Consumer Goods Services Pharma Cash & Cash Equivalent Chemicals Media & Entertainment Conruction Automobile

12 Kotak Emerging Equity About Kotak Mutual Fund Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. To know more Call : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Disclaimer Kotak Emerging Equity Scheme is an openended equity growth scheme. Invement Objective: The invement objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by inveing predominantly in mid and small cap companies. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com Kotak Emerging Equity*Performance (%) as on 31 Augu, 2017 Date Top 10 Companies as on 31 Aug, 2017 IndusInd Bank Ltd. Banks 3.31% Schaeffler India Ltd Indurial Products 3.19% Atul Ltd. Chemicals 2.82% RBL Bank Ltd Banks 2.61% The Ramco Cements Ltd Cement 2.55% Bata India Ltd. Consumer Durables 2.48% Motherson Sumi Syems Ltd. Auto Ancillaries 2.48% Federal Bank Ltd. Banks 2.24% Finolex Cables Ltd. Indurial Products 2.24% Bharat Earth Movers Ltd. Indurial Capital Goods 2.23% Kotak Emerging Equity Fund Since Inception ,967 33,365 25,953 La 1 Year La 3 Years La 5 Years Scheme S&P BSE Nifty 50 Current Value of Standard Invement Returns Mid Small ## (%) of ` in the (%) ^ Cap Index # (%) Scheme ( `) Benchmark # ( `) Additional Benchmark ## ( `) Scheme Inception date is 30/03/2007. Mr. Pankaj Tibrewal has been managing the fund since 27/05/2010. Different plans have different expense ructure. The performance details provided herein are of regular plan. ^Pa performance may or may not be suained in future.*all payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. # Name of Scheme Benchmark. ## Name of Additional Benchmark. Please refer page no. 21 for other schemes managed by Mr. Pankaj Tibrewal. LOW Riskometer Moderate Inveors underand that their principal will be at moderately high risk HIGH This product is suitable for inveors who are seeking*: Long term capital growth Invement in equity & equity related securities predominantly in mid & small cap companies * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) May May Apr May May Apr

13 Kotak Duration Fund (formerly known as PineBridge India Short Term Fund ) Scheme Facts Structure An Open Ended Debt Scheme Month end AUM* (as on 31 Aug 2017) `6, crs Monthly Average AUM* `6, crs NAV (as on 31 Aug 2017) Growth Direct ` Regular Dividend ` Monthly Dividend Direct ` Weekly Dividend Direct ` Standard Growth ` Standard Monthly Dividend ` Standard Weekly Dividend ` Launch Date 6th March, 2008 Benchmark Crisil Liquid Fund Index Min. Initial Inv. `5000 & in multiples of `1 Additional Inv. `1000 & in multiples of `1 Standard Deviation^ 0.73% YTM 7.80% Portfolio Modified Duration 0.84 years Average Maturity 1.02 years *Source: MFI Explorer. ^ as on 31 Aug, Source: Value Research. Load Structure Entry Load: Nil Exit Load: Nil Any exit load charged (net off Service Tax, if any) shall be credited back to the Scheme; Note - Units issued on reinvement of dividends shall not be subject to entry and exit load. About Kotak Duration Plan The primary objective of the Scheme is to generate income through invement primarily in low duration debt & money market securities. There is no assurance or guarantee that the invement objective of the scheme will be achieved. Debt Market Outlook Augu began on a positive note with RBI Monetary Policy Committee announcing a 25bps rate cut in repo rates. Though the shorter-end of the yield curve remained anchored, the yield curve for 10-yr and above moved higher due to supply pressures and non-committal language of RBI. The FII limits were full in corporate bonds and gilts, during the month. However, ate development loans were readily available for these inveors. The corporate bonds and SDLs performed well during the month. India is a fundamentally rong ory with a long way to go. India will continue to deliver superior risk adjued returns either on the back of duration play or on the back of carry in credit assets. We also expect INR to continue relative rengthening/ low depreciation over next 5 yrs. Portfolio Action Given the above outlook we intend to maintain the average maturity at the higher end of the indicated band. The focus is to enhance the portfolio yield while maintaining the liquidity and maturity of the portfolio in the indicated band. We intend to maintain the modified duration in the range of in September 2017 Particulars 31 July Aug 2017 Avg. Maturity (in yrs) Duration Yield (in %) Asset Allocation as on 31 Aug, 2017 Debentures and Bonds 78.57% Commercial Paper (CP)/Certificate of Deposits (CD) 9.70% CBLO & Term Deposits & Rev.Repo 5.32% Government Dated Securities 2.60% Net Current Assets 2.58% Treasury Bills 1.23% Top 10 Companies as on 31 Aug, 2017 Vedanta Ltd. CRISIL AA 10.27% Karelides Traders Private Ltd. (backed by unconditional and irrevocable undertaking by a wholly owned subsidiary of Piramal Enterprises Ltd ) ICRA AA-(SO) 6.35% Dewan Housing Finance Corporation Ltd. CARE AAA 5.61% AXIS Bank Ltd.(^) CRISIL AA+ 5.45% S D Corporation Private Limited ( DSRA Guarantee from Shapoorji Pallonji and Company Private Limited) CARE AA+(SO) 5.08% Manappuram Finance Ltd.(^) ICRA AA- 4.21% Innovador Traders Pvt Ltd ( backed by unconditional and irrevocable undertaking by Piramal ) ICRA AA-(SO) 3.54% PNB Housing Finance Ltd. CARE A % Sahyadri Agencies Ltd ( Secured by Equity shares of Jyothy Laboratories Ltd ) BRICKWORK BWR A(SO) 3.09% Muthoot Finance Ltd(^) CRISIL AA 3.00% (^) Fully or Party blocked again Intere Rate Swap (IRS) 11 7

14 Kotak Duration Fund (formerly known as PineBridge India Short Term Fund ) About Kotak Mutual Fund Rating Profile as on 31 Aug, 2017 Kotak Mahindra Asset Management Company Limited (KMAMC) is a wholly owned subsidiary of Kotak Mahindra Bank Limited (KMBL). KMBL has over two decades of experience in financial services. KMBL has a market capitalization of ` bn (as on 31 Augu, 2017). KMAMC is the Asset Manager for Kotak Mahindra Mutual Fund (KMMF). It arted operations in December KMMF offers schemes catering to inveors with varying risk - return profiles and was the fir fund house in the country to launch a dedicated gilt scheme. KMAMC manages assets worth `1,14,264.09cr cr as on 31 Augu, Net Current Assets CBLO & Term Deposits & Rev.Repo A, BWR A(SO), A- A1+, AAA, AAA(SO), IND A1+, IND A1+(SO), IND AAA, SOV AA+, AA+(SO), AA, AA(SO), BWR AA, AA-, AA-(SO),BWR AA-(SO), IND AA * The numbers are converted using the Rupee- USD reference rate published by the Reserve Bank of India as on the respective dates. Kotak Duration Fund* Performance (%) as on 31 Augu, 2017 To know more Call : (Toll Free), Mumbai , Delhi / 02, Chennai / , Kolkata / 03, Pune / 96, Ahmedabad , Bangalore / 51, Hyderabad / 41. Visit - assetmanagement.kotak.com - mutual@kotak.com Disclaimer Kotak Duration Fund is an open - ended debt scheme. Invement Objective: The primary objective of the Scheme is to generate income through invement primarily in low duration debt & money market securities. There is no assurance or guarantee that the invement objective of the scheme will be achieved. Mutual Fund invements are subject to market risks, read all scheme related documents carefully. Scheme Information Document (SID) and Statement of Additional Information (SAI) available on mutualfund.kotak.com Date Kotak Duration Fund Scheme Returns (%) ^ CRISIL Liquid Fund Index # (%) CRISIL 1 Year T-Bill Index ## (%) Since Inception ,457 20,084 18,143 La 1 Year La 3 Years La 5 Years Current Value of Standard Invement of ` in the Scheme Benchmark Additional ( `) # ( `) Benchmark ## ( `) Scheme Inception date is 06/03/2008. Mr. Deepak Agrawal has been managing the fund since 01/02/2015. Different plans have different expense ructure. The performance details provided herein are of regular plan. ^Pa performance may or may not be suained in future. *All payouts during the period have been reinveed in the units of the scheme at the then prevailing NAV. Returns > = 1 year: CAGR (Compounded Annualised Growth Rate). N.A ands for data not available. Note: Point to Point (PTP) Returns in INR shows the value of `10,000/- invement made at inception. Source: ICRA MFI Explorer. Classification of schemes in short term & long term is based on the average maturity of the scheme. # Name of Scheme Benchmark. ## Name of Additional Benchmark. Please refer page no. 21 for top 3 and bottom 3 schemes managed by Mr. Deepak Agrawal. Riskometer Moderate This product is suitable for inveors who are seeking*: Regular income over short term Income by focusing on low duration securities * Inveors should consult their financial advisors if in doubt about whether the product is suitable for them. LOW HIGH Inveors underand that their principal will be at moderate risk 12

15 Kotak Bond Short Term Scheme Facts Structure An Open Ended Debt Scheme Month end AUM* (as on 31 Aug 2017) `9, crs Monthly Average AUM* `8, crs NAV (as on 31 Aug 2017) Dividend ` Dividend Direct ` Half Yearly Dividend ` Half Yearly Dividend Direct ` Growth ` Growth Direct ` Launch Date 2nd May, 2002 Benchmark Crisil Short - Term Bond Fund Index Min. Initial Inv. (a) Dividend Re-invement & Growth - `5000 & above (b) Dividend Payout (Monthly Dividend) -`50,000& above Additional Inv. `1000 & in multiples of ` 1 Standard Deviation^ 1.88% About Kotak Bond Short Term The invement objective of Kotak Bond Short Term is to provide reasonable returns and high level of liquidity by inveing in debt and money market inruments of different maturities so as to spread the risk across different kind of issuers in the debt market. The scheme is suitable for inveors who may generally want to position themselves at the shorter end of the yield curve with a time horizon of 6 months and more. Debt Market Outlook Augu began on a positive note with RBI Monetary Policy Committee announcing a 25bps rate cut in repo rates. Though the shorter-end of the yield curve remained anchored, the yield curve for 10-yr and above moved higher due to supply pressures and non-committal language of RBI. The FII limits were full in corporate bonds and gilts, during the month. However, ate development loans were readily available for these inveors. The corporate bonds and SDLs performed well during the month. India is a fundamentally rong ory with a long way to go. India will continue to deliver superior risk adjued returns either on the back of duration play or on the back of carry in credit assets. We also expect INR to continue relative rengthening/ low depreciation over next 5 yrs. Portfolio Action Given the above outlook we intend to maintain the average maturity at the higher end of the indicated band. We believe that short term curve (2-3 year assets) are be point on the yield curve. While 5 year assets are the highe yielding and therefore are likely to maintain adequate mix of assets in the portfolio. We intend to maintain the modified duration in the range of in September 2017 Particulars 31 July Aug 2017 Avg. Maturity (in yrs) Duration Yield (in %) YTM 7.06% Portfolio Modified Duration 1.89 years Average Maturity 2.31 years *Source: MFI Explorer. ^ as on 31 Aug, Source: Value Research. Load Structure Entry Load: Nil Exit Load: Nil Asset Allocation as on 31 Aug, 2017 Debentures and Bonds 77.69% Government Dated Securities 18.94% Treasury Bills 1.37% Net Current Assets 1.34% CBLO & Term Deposits & Rev.Repo 0.66% 13