FUNDS IN FOCUS JANUARY 31, 2017

Transcription

1 FUNDS IN FOCUS JANUARY 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 Jan 2017) `5, crs Monthly Average AUM* `5, crs NAV (as on 31 Jan 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^ 0.52% Beta^ 0.52 Sharpe^ 1.92 Portfolio Turnover % *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. 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 Po Trump election, global outflows from emerging markets as well as uncertainty on account of demonetisation impacted markets but things seem to be returning back to normalcy. The demonitisation impact is also waning as indicated by the quarterly results and earnings calls. Po demonetisation and then GST, unorganised to organised shift can become a big theme with all the lied players who compete with unorganised manufacturers benefitting. India to benefit from demonetisation in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Global events Fed hiking, Chinese currency depreciation etc to add to near-term volatility. Time in the market more important than timing the market volatility in markets to remain elevated. Portfolio Action The roll spread (annualized and adjued for fresh arbitrage positions initiated) on the arbitrage book is approximately 5.30%. Around 69% of the corpus is deployed into arbitrage trades and remaining in FDs, debt and money market inruments. The FDs, debt and money market inruments offer a better return and should move the final return of the scheme higher. The spreads were very subdued as we entered the expiry week but 2 factors led to the rise in spreads subsequently: 1. The buying from FIIs during the la 2 days led to building up of positive sentiment which, in turn, led to the rise in spreads. 2. Earlier, the limit in any single ock irrespective of its market cap was INR 150 crs i.e. a fund was not allowed to hold a position upwards of INR 150 crs in any particular ock. This limit got revised materially upwards from Jan 2, This allowed the bigger arbitrage funds to have a higher position in ocks like HDFC Bank which have hiorically rolled at very high spreads. Plus, it obviated the necessity to compulsorily deploy the money in other ocks which were yielding lower returns. As the roll pressure from the arbitrage funds on these ocks reduced, the spreads in these ocks also inched up to some extent. The funds which were much more proactive and rolled their positions earlier suffered whereas the funds which waited to roll their positions till the la 2 days (either by design or otherwise) benefitted a lot. We had rolled less than 15% of our arbitrage positions prior to Jan 24 and hence, in some way benefitted from the rise in spreads. We have been maintaining that in view of the rise in the corpus of the arbitrage indury, the bullish sentiments need to return for the arbitrageurs to command a good spread on their arbitrage positions. The revival of bullish sentiments happened only in the la 2 days of expiry. We believe that if this revival in bullish sentiments would have happened earlier, the increase in spreads would have been more pronounced. 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. Units issued on reinvement of dividends shall not be subject to entry and exit load. Sector Allocation as on 31 January, 2017 CBLO & Term Deposits & Rev.Repo 17.08% Banks 11.12% Debentures and Bonds 10.35% Finance 10.11% Consumer Non Durables 6.39% Auto 5.73% Pharmaceuticals 5.11% Petroleum Products 3.94% Power 2.98% Government Dated Securities 2.88% Others 24.31% 1

4 Kotak Equity Arbitrage Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sept Aug Jul Jun May Mar Feb Jan Bimonthly Plan - Dividend Option Jan Nov Sep Jul May Mar Jan 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 January, 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 ` cr as on 31 January, * 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 January, 2017 Kotak Equity Arbitrage* (Div) Performance (%) as on 31 December, 2016 Date HDFC Bank Ltd. Banks 6.07% HDFC Ltd. CRISIL AAA 3.56% Kotak Mahindra Prime Ltd. CRISIL AAA 3.31% Reliance Induries Ltd. Petroleum Products 3.12% 7.88% Central Government SOV 2.88% Mahindra & Mahindra Financial Services Ltd. FITCH IND AAA 2.68% Asian Paints Ltd. Consumer Non Durables 2.07% HDFC Ltd. Finance 1.94% JSW Steel Ltd. Ferrous Metals 1.88% Cairn India Limited Oil 1.82% 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 till Dec 31, NA ,118 NA 31,349 Dec 31, 2015 To Dec 31, Dec 31, 2014 To Dec 31, NA Dec 31, 2013 To Dec 31, Scheme Inception date is 29/09/2005. Fund Managed by Mr. Deepak Gupta. ^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: Absolute; 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. 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 2

5 Kotak Equity Savings Fund Scheme Facts Structure An Open Ended Equity Scheme Month end AUM* (as on 31 Jan 2017) ` crs Monthly Average AUM* ` crs NAV (as on 31 Jan 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^ 3.59% Beta^ 0.97 Sharpe^ 0.23 Portfolio Turnover % *Source: MFI Explorer. ^as on 31 Jan, 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 Po Trump election, global outflows from emerging markets as well as uncertainty on account of demonetisation impacted markets but things seem to be returning back to normalcy. The demonitisation impact is also waning as indicated by the quarterly results and earnings calls. Po demonetisation and then GST, unorganised to organised shift can become a big theme with all the lied players who compete with unorganised manufacturers benefitting. India to benefit from demonetisation in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Global events Fed hiking, Chinese currency depreciation etc to add to near-term volatility. Time in the market more important than timing the market volatility in markets to remain elevated. Portfolio Action Directional Equity: The directional equity was closer to 22.2%. 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. In the la few months, 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% annualised. 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 seek to follow a barbell rategy where some portion is inveed in GSecs, some in one year FDs and remaining in 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. The exposure in GSecs has been pruned over 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 January, 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 ` cr as on 31 January, * 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 Portfolio Detail Kotak Equity Savings Fund * Performance (%) as on 31 December, 2016 Date Kotak Equity Savings Fund Scheme 75% Nifty 50 Nifty Current Value of Standard Invement Returns Arbitrage Index 50 of ` in the (%) ^ 25% Scheme ( `) Benchmark Additional # (%) # ( `) Benchmark ## ( `) Since Inception till Dec 31, ,664 10,833 10,382 Dec 31, 2015 To Dec 31, NA Dec 31, 2014 To Dec 31, Scheme Inception date is 13/10/2014. Fund Managed by Mr. Deepak Gupta & Mr. Abhishek Bisen. % of Net assets Unhedged Position Cash Futures arbitrage Debt Inruments Cash and Cash equivalent and Net Current Asset Total ^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: Absolute; 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. 22&23 for top 3 and bottom 3 schemes managed by Mr. Deepak Gupta & Mr. Abhishek Bisen. 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 LOW Riskometer Moderate Inveors underand that their principal will be at moderately high risk HIGH 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. Date CUM Dividend Dividend NAV ( ` per unit) Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sept Aug Quaterly Dividend Option Dec Sep Jun Mar

7 Kotak 50 Scheme Facts Structure An Open Ended Equity Scheme Month end AUM* (as on 31 Jan 2017) `1, crs Monthly Average AUM* `1, crs NAV (as on 31 Jan 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^ 14.49% Beta^ 1.00 Sharpe^ 0.79 Portfolio Turnover 70.03% *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. Market Cap. % Large Cap Mid Cap Small Cap 0.00 Cash 1.90 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 Po Trump election, global outflows from emerging markets as well as uncertainty on account of demonetisation impacted markets but things seem to be returning back to normalcy. The demonitisation impact is also waning as indicated by the quarterly results and earnings calls. Po demonetisation and then GST, unorganised to organised shift can become a big theme with all the lied players who compete with unorganised manufacturers benefitting. India to benefit from demonetisation in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Global events Fed hiking, Chinese currency depreciation etc to add to near-term volatility. Time in the market more important than timing the market volatility in markets to remain elevated. 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 capital goods, autos and cement, while underweight commodities, telecom and banks. Within banks, we continue to be positive on retail oriented banks and within corporate banks, prefer private sector banks. During the month we added gas utilities, retailing companies, while reducing exposure to power utilities. Top 10 Sectors as on 31 January, 2017 Sector % Weight Underweight / Previous Change overweight Month in portfolio Portfolio Benchmark again (Portfolio % from previous (NIFTY 50) benchmark Weight) month Banking & Finance Auto & Auto Ancillary Information technology FMCG Oil & Gas Pharmaceutical Cement & Cement Products Capital Goods & Engineering Media Fertilisers

8 Kotak 50 Dividend Hiory Date CUM Dividend Dividend NAV ( ` per unit) 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 January, 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 ` cr as on 31 January, * 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 January, 2017 HDFC Bank Ltd. Banks 8.10% Infosys Ltd. Software 6.02% ITC Ltd. Consumer Non Durables 5.59% ICICI Bank Ltd. Banks 4.66% IndusInd Bank Ltd. Banks 4.51% Maruti Suzuki India Limited Auto 3.98% Hero MotoCorp Ltd. Auto 3.55% Axis Bank Ltd Banks 3.35% Reliance Induries Ltd. Petroleum Products 3.25% Tata Motors Ltd - DVR Auto 3.10% Kotak 50* (Div) Performance (%) as on 31 December, 2016 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 till Dec 31, ,691 93,804 87,406 Dec 31, 2015 To Dec 31, Dec 31, 2014 To Dec 31, NA Dec 31, 2013 To Dec 31, Scheme Inception date is 29/12/1998. Fund Managed by Mr. Harish Krishnan. ^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: Absolute; 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 Jan 2017) `7, crs Monthly Average AUM* `7, crs NAV (as on 31 Jan 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^ 15.49% Beta^ 1.03 Sharpe^ 1.13 Portfolio Turn over 32.60% *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. Market Cap. % Large Cap Mid cap Small cap 0.70 Cash 7.36 As on 31 Jan, 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 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 Po Trump election, global outflows from emerging markets as well as uncertainty on account of demonetisation impacted markets but things seem to be returning back to normalcy. The demonitisation impact is also waning as indicated by the quarterly results and earnings calls. Po demonetisation and then GST, unorganised to organised shift can become a big theme with all the lied players who compete with unorganised manufacturers benefitting. India to benefit from demonetisation in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Global events Fed hiking, Chinese currency depreciation etc to add to near-term volatility. Time in the market more important than timing the market volatility in markets to remain elevated. Portfolio Action The portfolio continues to have a pro-cyclical tilt. The top overweight sectors in the fund are Cement, Oil&Gas and Capital Goods. Demonetisation drive has rendered short term outlook hazy for broad set of inveee companies. However, we believe, Government will 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. Apart from already weak fundamentals, these sectors are prone to possible adverse change in US policies. Large cap allocation is about 74%. Top Sectors as on 31 January, 2017 Sector % Weight Underweight / Previous Change overweight Month in portfolio Portfolio Benchmark again (Portfolio % from previous (Nifty 200) Entry Load: Nil Exit Load: Banking & Finance benchmark Weight) month 1.46 I) For redemptions / switch outs (including Oil & Gas SIP/STP) within 1 year from the date of Auto & Auto Ancillary allotment of units, irrespective of the amount of invement:1% Cement & Cement Products ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment FMCG Capital Goods & Engineering of units, irrespective of the amount of Information technology invement: NIL Pharmaceutical 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) 7

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 January, 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 ` cr as on 31 January, * 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 January, 2017 HDFC Bank Ltd. Banks 6.15% Reliance Induries Ltd. Petroleum Products 4.14% ITC Ltd. Consumer Non Durables 4.11% Hero MotoCorp Ltd. Auto 3.85% Ultratech Cement Ltd. Cement 3.77% Maruti Suzuki India Limited Auto 3.57% The Ramco Cements Ltd Cement 3.36% IndusInd Bank Ltd. Banks 3.35% State Bank Of India Banks 2.91% Shree Cement Ltd. Cement 2.72% Kotak Select Focus* Performance (%) as on 31 December, 2016 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 till Dec 31, ,005 17,422 16,949 Dec 31, 2015 To Dec 31, Dec 31, 2014 To Dec 31, NA Dec 31, 2013 To Dec 31, Scheme Inception date is 11/09/2009. Fund Managed by Mr. Harsha Upadhyaya. ^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: Absolute; 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 Jan 2017) `1, crs Monthly Average AUM* `1, crs NAV (as on 31 Jan 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^ 17.32% Beta^ 0.94 Sharpe^ 1.54 Portfolio Turnover 35.76% *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. ` ` ` ` Market Cap. % Large Cap 9.89 Midcap Smallcap Cash 6.05 As on 31 Jan, 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 Po Trump election, global outflows from emerging markets as well as uncertainty on account of demonetisation impacted markets but things seem to be returning back to normalcy. The demonitisation impact is also waning as indicated by the quarterly results and earnings calls. Po demonetisation and then GST, unorganised to organised shift can become a big theme with all the lied players who compete with unorganised manufacturers benefitting. India to benefit from demonetisation in the medium-to-long-term, significant flow from physical to financial savings to further provide ability to markets. Global events Fed hiking, Chinese currency depreciation etc to add to near-term volatility. Time in the market more important than timing the market volatility in markets to remain elevated. 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 cement, capital goods & engineering, auto ancillary, media, financials and consumer discretionary. The near term disruption due to demonetisation may impact some of our inveee companies or sectors adversely from an earnings point of view but we believe that from a medium term perspective the organised players would become ronger as unorganised sector would find it tough to do business in the changed environment and cede market share to more organised players. In the IT and pharma sector we continue to have ock specific approach. The fund continues the underweight ance on consumer aples and pharma. During the month we marginally decreased weight on financials and cement. Weight in other sectors remained largely unchanged. Incrementally the valuations in the pharma sector have arted to become attractive and we would look to reduce our Underweight ance as and when we get the opportunity over the next 12-18months. Top 10 Sectors as on 31 January, 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 Banking & Finance Capital Goods & Engineering Auto & Auto Ancillary Pharmaceutical Media FMCG Durables Chemicals Cement & Cement Products Information technology

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 January, 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 ` cr as on 31 January, * 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 December, 2016 Date Top 10 Companies as on 31 January, 2017 IndusInd Bank Ltd. Banks 3.40% Fag Bearings India Ltd. Indurial Products 3.01% V-Guard Induries Ltd. Indurial Capital Goods 2.94% Atul Ltd. Chemicals 2.81% The Ramco Cements Ltd Cement 2.77% Solar Induries India Limited Chemicals 2.56% Finolex Cables Ltd. Indurial Products 2.53% Strides Shasun Ltd. Pharmaceuticals 2.38% Persient Syems Limited Software 2.29% Whirlpool of India Ltd. Consumer Durables 2.24% Kotak Emerging Equity Fund Since Inception till Dec 31, ,441 25,438 21,420 Dec 31, 2015 To Dec 31, Dec 31, 2014 To Dec 31, NA Dec 31, 2013 To Dec 31, Scheme Inception date is 30/03/2007. Fund Managed by Mr. Pankaj Tibrewal.. Scheme S&P BSE Nifty 50 Current Value of Standard Invement Returns Mid Small ## (%) of ` in the (%) ^ Cap Index # (%) Scheme ( `) Benchmark # ( `) Additional Benchmark ## ( `) ^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: Absolute; 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 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 Jan 2017) `4, crs Monthly Average AUM* `3, crs 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 Brief NAV (as on 31 Jan 2017) Growth Direct ` Regular Dividend ` Monthly Dividend Direct ` Weekly Dividend Direct ` Standard Growth ` Standard Monthly Dividend ` Standard Weekly Dividend ` Launch Date 2017, the year of the Rooer, began on a rong note. In a global scenario of rising bond yields, INR bond yields fell defiantly, after a sharp spike in December. With a cut in borrowing and MCLR rate cuts added to the mix, there was a short squeeze in bonds which were trading in an oversold zone. We are moving towards rong government fiscal health with a broadening tax base. Therefore government can spend money on developing infraructure and rengthening the overall banking syem. As announced in the Union budget on 1 Feb 2017, the government aims to bring the fiscal deficit down to 3.2% (from 3.5%, in current year) in FY Further the government also announced a net borrowing number of Rs lakh crores in Fy18. This was perceived positively by the bond markets which saw a rally po the Budget announcement. Addressing concerns arising from global inflation and economic impact of demonetization, the MPC (Monetary Policy Committee) decided to hold rates with a hawkish guidance. 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^ 0.77% YTM 8.08% Portfolio Modified Duration Portfolio Action The fund is the appropriate vehicle to take higher risk than liquid scheme but lower than Kotak Income Opportunities. This fund enjoys significantly higher carry over Treasury advantage Fund which has similar volatility risk and marginally lower credit risk The month end YTM of the scheme was 8.08% (v/s 8.35% in Dec 16), the average maturity was 1.18 year (v/s 1.15 yr in Dec 16). During the month, we have increased our holding of longer-duration assets in the portfolio (i.e. 3-5 year assets). We believe that there is value to be earned in the 3-5 year assets. However, due to MCLR cut announcements and excessive liquidity, the month of January saw significant spread compression in corporate bonds. This resulted in the YTM falling in the short-run by ~25-26 bps. We will maintain the current rategy and positioning in the month of February and reassess our rategy as required in the light of changing market conditions years Average Maturity 1.18 years *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. Asset Allocation as on 31 January, 2017 Debentures and Bonds 82.39% Commercial Paper (CP)/Certificate of Deposits (CD) 15.17% CBLO & Term Deposits & Rev.Repo 1.34% Net Current Assets 1.10% 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. Top 10 Companies as on 31 January, 2017 Tata Power Company Ltd. ICRA AA 10.01% IDFC Bank Limited ICRA A % Vedanta Ltd. CRISIL AA- 8.90% Manappuram Finance Ltd ICRA AA- 5.97% Indiabulls Housing Finance Limited CARE AAA 5.37% AdaniPowerLtd(SecuredbyEquitysharesofAdaniPorts andsezltd,adanitransmissionandadanienterprises) BRICKWORKBWRAA-(SO) 4.75% Sahyadri Agencies Ltd ( Secured by Equity shares of Jyothy Laboratories Ltd ) BRICKWORK BWR A(SO) 4.24% HDFC Ltd. CRISIL AAA 3.97% Tata Motors Ltd. CARE AA+ 3.60% Shriram Transport Finance Co Ltd. FITCH IND AA+ 3.57% 11 7

14 Kotak Duration Fund (formerly known as PineBridge India Short Term Fund ) About Kotak Mutual Fund Rating Profile as on 31 January, 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 January, 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 ` cr as on 31 January, Net Current Assets CBLO & Term Deposits & Rev.Repo A+, A, BWR A, BWR A(SO), A- A1+, AAA, IND AAA AA+, IND AA+, AA, AA(SO), AA-, 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 December, 2016 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 till Dec 31, ,442 19,227 17,461 Dec 31, 2015 To Dec 31, Dec 31, 2014 To Dec 31, NA Dec 31, 2013 To Dec 31, Current Value of Standard Invement of ` in the Scheme Benchmark Additional ( `) # ( `) Benchmark ## ( `) Scheme Inception date is 06/03/2008. Fund Managed by Mr. Deepak Agrawal. ^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: Absolute; 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 Jan 2017) `8, crs Monthly Average AUM* `8, crs NAV (as on 31 Jan 2017) 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 Brief Dividend Dividend Direct Half Yearly Dividend Half Yearly Dividend Direct Growth Growth Direct Launch Date 2nd May, 2002 Benchmark ` ` N/A ` ` ` , the year of the Rooer, began on a rong note. In a global scenario of rising bond yields, INR bond yields fell defiantly, after a sharp spike in December. With a cut in borrowing and MCLR rate cuts added to the mix, there was a short squeeze in bonds which were trading in an oversold zone. We are moving towards rong government fiscal health with a broadening tax base. Therefore government can spend money on developing infraructure and rengthening the overall banking syem. As announced in the Union budget on 1 Feb 2017, the government aims to bring the fiscal deficit down to 3.2% (from 3.5%, in current year) in FY Further the government also announced a net borrowing number of Rs lakh crores in Fy18. This was perceived positively by the bond markets which saw a rally po the Budget announcement. Addressing concerns arising from global inflation and economic impact of demonetization, the MPC (Monetary Policy Committee) decided to hold rates with a hawkish guidance. 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^ 1.98% Portfolio Action We have positioned our short-term scheme, with asset allocation of around 75-80% bonds, and 20-25% gilts. The overall YTM of the fund was at 7.23% (v/s 7.56% in Dec 16). The average maturity was brought down to 2.77 yrs (v/s 3.87 yrs in Dec 16). The duration of the fund ood at 2.33 (as compared to 2.96 in Dec 16). Excessive liquidity in the syem, spread compression in corporate bonds have all led to a decrease in the YTM on m-o-m basis. We hope to continue with our ance in February and closely monitor and reassess the same in the light of changing market conditions. YTM 7.23% Portfolio Modified Duration 2.33 years Average Maturity 2.77 years *Source: MFI Explorer. ^ as on 31 Jan, Source: Value Research. Load Structure Entry Load: Nil Exit Load: Nil Asset Allocation as on 31 January, 2017 Debentures and Bonds 75.01% Government Dated Securities 18.99% Commercial Paper (CP)/Certificate of Deposits (CD) 4.78% Net Current Assets 0.68% Treasury Bills 0.54% 13