The transport and logistics market in India is poised for rapid transformation, with the organized sector projected to grow at an impressive 35% CAGR, increasing its share from 3.5% in FY20 to 15% by FY26. This significant shift is driven by the rise of integrated logistics solution providers, which are expected to become key players in the sector’s evolution.
Utilising this growth potential, Kotak Mutual Fund has launched the Kotak Transportation & Logistics Fund, a thematic investment opportunity focusing on the transportation and logistics ecosystem.
Let’s explore the NFO’s details and understand why it could be a strategic addition to your portfolio.
Details of Kotak Transportation & Logistics Fund NFO
The Kotak Transportation & Logistics Fund is an open-ended equity scheme designed to invest in companies engaged in transportation, logistics, and related activities. By focusing on a vital growth sector, the fund aims to deliver long-term capital appreciation.
Investment Objective of the Fund
The primary objective of the fund is to generate long-term capital appreciation by predominantly investing in equity and equity-related instruments of companies operating in the transportation and logistics sectors. However, it does not guarantee returns or the fulfilment of its investment objective.
Key Details of Kotak Transportation & Logistics Fund
| Kotak Transportation & Logistics Fund | |
| Attributes | Details |
| Fund House/ Asset Management Company | Kotak Mahindra Mutual Fund |
| Risk Profile | Very High |
| Fund Manager | Mr. Nalin Bhatt (Equity) and Mr. Abhishek Bisen (Debt) |
| Category | Equity Schemes –Thematic Fund |
| NFO Opens | November 25, 2024 |
| NFO Closes | December 09, 2024 |
| Benchmark Index | Nifty Transportation & Logistics Total Return Index (TRI) |
| Exit Load | 1% for redemption/switch-out within 30 days; Nil after 30 days |
| Minimum Application Amount | ₹100 and any amount thereafter |
Portfolio Construction
The Kotak Transportation & Logistics Fund aims to construct a portfolio by focusing on companies that are leaders in or significantly benefit from the transportation and logistics sectors. The fund’s asset allocation will emphasize a mix of equity and debt instruments while exploring international opportunities through foreign securities.
The scheme allocates its assets as follows:
| Instruments | Indicative Allocations (% of Total Assets) |
| Equity and Equity-Linked Securities of Companies Involved in Transportation & Logistics and Related Activities | 80% – 100% |
| Equity and Equity-Linked Securities of Companies Not Involved in Transportation & Logistics Activities | 0% – 20% |
| Debt and Money Market Instruments | 0% – 20% |
| Units of Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InvITs) | 0% – 10% |
Understanding Risks and Returns
Investing in a thematic fund like the Kotak Transportation & Logistics Fund offers exposure to a high-growth sector but comes with a very high-risk profile. Market fluctuations and sector-specific challenges may result in volatility.
The benchmark, Nifty Transportation & Logistics TRI, has delivered returns of 41.23%, 27.40%, and 27.04% in the past 1 year, 3 years, and 5 years respectively. This offers investors a strong reference point for expected returns.
However, tracking errors are possible due to the fund’s active management and focus on a specific theme.
Asset Management Company
Kotak Mahindra Asset Management Company Limited (KMAMC) was founded on August 2, 1994, under the Companies Act of 1956, to manage the Kotak Mahindra Mutual Fund (KMMF). As a key player in the asset management sector, Kotak has introduced several innovative investment products. It was the first to launch a gilt fund focused solely on government securities. As of June 30, 2024, Kotak Mutual Fund oversees assets worth ₹444,792.28 crore, making it one of the top mutual fund firms in India.
Meet the Fund Managers
The fund is managed by experienced professionals:
Mr. Nalin Rasik Bhatt
Mr Bhatt, with over 20 years of experience in equity research and fund management, is the designated Fund Manager for equity-related schemes at Kotak Mahindra Asset Management Company. He has previously worked with prominent firms such as Motilal Oswal Securities, Angel Broking, and Sushil Stock Brokers. Mr. Bhatt currently manages the Kotak Infrastructure & Economic Reform Fund, focusing on equity investments in infrastructure and economic reform sectors.
Mr. Abhishek Bisen
Mr. Abhishek Bisen, with a background in Management (BA) and Finance (MBA), has been with Kotak AMC since 2006, specializing in debt fund management. Before joining Kotak, he worked with Securities Trading Corporation of India Ltd., handling fixed income product trading and portfolio advisory. Over the years, he has managed several schemes, including Kotak Equity Hybrid Fund, Kotak Debt Hybrid Fund, Kotak Bond Fund, Kotak Gilt Fund, Kotak Balanced Advantage Fund, and Kotak Multi Asset Allocation Fund, among many others, covering a wide range of equity and debt-oriented strategies.
Who Should Invest in This NFO?
The Kotak Transportation & Logistics Fund is ideal for:
- Investors seeking long-term capital appreciation through exposure to India’s booming transportation and logistics sectors.
- Individuals looking to diversify their portfolios with a high-growth thematic investment.
- Investors with a high-risk tolerance, are ready to navigate the volatility associated with sector-focused equity funds.
Conclusion
The Kotak Transportation & Logistics Fund offers a unique opportunity to invest in a rapidly evolving sector poised for substantial growth. With the potential for long-term capital appreciation, this thematic fund aligns with the increasing prominence of integrated logistics solution providers in India’s economy.
For investors looking to diversify their portfolio with exposure to the booming transportation and logistics sector, starting a Systematic Investment Plan (SIP) through the best SIP platform can be a convenient way to take advantage of this fund. Don’t miss out on this opportunity to benefit from one of India’s most promising sectors.
Suggested Read – Should you invest in mutual funds when markets are down wisely?
