Kotak Bond Fund

The Kotak Mutual Fund house manages it (Kotak MF) and currently holds INR 1940.47 crores of assets under management (AUM). The investments are spread across the market to spread the risk across assets and, hence, hold up the fund's performance.

The Kotak Bond Fund is offered in two plans:

• Kotak Bond Fund – Regular Plan.
• Kotak Bond Fund – Direct Plan.

The direct plan is suitable for those investors who don't require any distributors to route their purchases. Hence, it yields a higher return of up to 1.03% compared to the regular plan, which requires distributors in between.

The above plan options further offer two more variants to choose from. They determine how the investor wants to receive the returns earned. They are:

• The Growth option – returns earned are reinvested automatically.
• The Income Distribution and Cash Withdrawal (IDCW) option – It gives the investor the choice of either withdrawing the return or reinvesting it.

Facts about the Fund: Table

Investment Objective

The Kotak Bond Fund aims at generating stable returns for its investors over the long run by investing in a variety of debts and money market securities. The choice of securities or bonds for investment is based upon how much credit risk it offers and how much rating it is receiving from the market. It also depends upon market conditions and interest and stability ratings. These choices are made after regular analysis of the market.

Like any other mutual fund, the Kotak Bond Fund also carries risk. To mitigate these risks, the investments are never concentrated in one sector of the market. They are spread widely across the market in a variety of assets. This also spreads the risk across the market, and hence, risks of the fund are reduced. Moreover, bond funds usually carry a lower risk as compared to equity funds. 

Fund Summary

1. Kotak Bond Fund Regular Plan

   • Risk – Moderate
   • Expense ratio – 1.77% (as of 31 May 2021)
   • Net Asset Value – INR 61.28 (as of 23 June 2021)
   • Returns – 4.52% (1 year)
   • Compound Annual Growth Rate (CAGR) – 8.76% (since inception)

2. Kotak Bond Fund Direct Plan

   • Risk – Moderate
   • Expense ratio – 0.74% (as of 31 May 2021)
   • NAV – INR 65.94 (as of 23 June 2021)
   • Returns – 5.66% (1 year)
   • CAGR – 8.39% (since inception)

   The IDCW option is offered either quarterly, half-yearly, or annually. The investor can choose either payout of dividend or reinvestment, depending upon their requirement. However, if the dividend is less than INR 500, then it has to be compulsorily reinvested. 

Fund Return Summary

The following table shows the return summary of the Kotak Bond Fund for the regular plan:

The following table shows the return summary of the Kotak Bond Fund for the direct plan:

Pros and Cons Of Kotak Bond Fund 

Benefits of the Kotak Bond Fund

• Lower risks involved: The best part about the bond funds is that the risks involved in them are far less than the equity funds. It makes it a safer option for investment.

• Stable returns: The Kotak Bond Fund aims at generating good returns for investors. And as the fund's history speaks for itself, it has been able to fulfill its aim, and investors have benefited from the stable returns of the fund.

• Long-term investment: As this fund yields returns in the long run, it is an excellent investment option for investors who aim to invest a portion of their surplus in the present and receive multiplied capital over time for future use.

• Consistent performance: With all its strategies of picking the right securities for investment and risk-management techniques, the fund has consistently performed well in the market. Backed up by such a positive track record, the fund's future looks good too, which makes it a reliable option for investment.

Fund House Details

The Kotak Bond Fund is offered by the Kotak Mutual Fund House, a part of the larger financial conglomerate – Kotak Mahindra Bank Limited. It is one of the largest private banks in India, and Kotak MF is the fastest-growing mutual fund house in India. It manages the assets of a large customer base, and it is ever-expanding. They aim to become the best and the most trusted fund managers. Therefore, they constantly strive for maximum customer satisfaction.

They believe in disciplined investment. Hence they always depend on deep research and analysis before making decisions. They understand the importance of money for their customers. Hence, they focus more on returning the invested capital without losing than returning interests on the invested capital. 

For this, they follow well worked out risk management techniques that help them in keeping their customer's money safe. They believe in maintaining a partnership with their customers, and hence, they try to provide the best products and financial advice to the customers.

Who Should Invest in the Kotak Bond Fund?

• Investors with long-term goals: Any investor who wishes to create a financial backup for the future will find this fund plan suitable for them as the fund's objective is to generate stable returns in the long run.

• Investors with low-risk taking capacity: People who want to invest in mutual funds to get good returns but with minimum risks should invest in this fund as the fund has moderate risk.

• Investors interested in investing in debt securities: If an investor prefers investing in debt securities, then the Kotak Bond Fund would be an ideal choice for them.

Conclusion

Therefore, to wrap it all, the Kotak Bond Fund is a debt fund, medium-long duration scheme to generate returns in the long run, offered by one of the most trusted and fastest-growing mutual fund houses. The fund is backed up by thorough research and analysis by the experts of Kotak MF. Also, keeping in mind the long history of the fund, it becomes one of the most reliable funds in the market. It is the reason why it has been performing so well in the market.

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