Kotak MF files for Nifty Smallcap 50 Index Fund

Kotak MF filed draft documents with the securities market regulator, SEBI for launching a Nifty Smallcap 50 Index Fund.

Going by the draft scheme information document or SID, the scheme has been labelled ‘very high risk’ on the Riskometer. The scheme will be benchmarked to the Nifty Smallcap 50 Total Return Index and will allocate 95-100% of its assets to the constituents of the Nifty Smallcap 50 Index and up to 5% to debt and money market instruments.

The Nifty Smallcap 50 Index captures the movement of the small cap segment of the market and was launched on April 1, 2016. It represents the top 50 companies selected based on the average daily turnover from the top 100 companies selected based on full market capitalisation in the Nifty Smallcap 250 Index. The index represented about 2% of the free float market capitalization of the stocks listed on the NSE as on March 29, 2019.

As of May 31, 2022, the top five sectors represented in the index were financial services (34% weight), information technology (17%), chemicals 9%), telecommunications (6%) and consumer durables (5%). Going by stock weights, the top holdings were Central Depository Services India (5%), KPIT Technologies (4%), PVR (3.9%), Computer Age Management Services (3.7%) and Multi Commodity Exchange of India (3.4%). The Nifty Smallcap 50 TRI has returned 9.9% since its inception. Over the last one year, the index has returned -8.3%.