Kotak Nifty 1D Rate Liquid ETF

About Kotak Nifty 1D Rate Liquid ETF

• Kotak Nifty 1D Rate Liquid ETF is an open-ended liquid debt scheme launched by Kotak Mahindra Mutual Fund House.
• The fund invests in government securities and treasury bills with a maximum maturity period of three months.
• The fund was launched on January 24, 2023.
• Abhishek Bisen and Satish Dondapati are the managers of the Kotak Nifty 1D Rate Liquid ETF.
• Kotak Nifty 1D Rate Liquid ETF’s assets under management (AUM) stood at ₹46 crore, as of June 30, 2024.
• As the ETF units are listed on the NSE, BSE one can invest by buying its units through a demat account.
• The ETF units can be traded just like equities during the usual trading market hours

Investment Objective & Benchmark

• The investment objective of the Kotak Nifty 1D Rate Liquid ETF is to invest in Tri-Party Repos in Government Securities or Treasury Bills (TREPS).
• It is benchmarked against the Nifty 1D Rate Index.
• This ETF invests in money market instruments such as treasury bills, certificates of deposit, commercial papers, and other short-term debt instruments that provide liquidity and safety.
• The Kotak Nifty 1D Rate Liquid ETF aims to provide returns that closely correspond to the overnight call money market rates as measured by the Nifty 1D Rate Index.
• The ETF is suitable for investors seeking stable income and capital preservation.
• Bond ETFs can provide significant tax efficiency benefits, including reduced tax rates and potential indexation advantages for long-term capital gains.
• Kotak Nifty 1D Rate Liquid ETF is suitable for investors looking for low-risk investments with moderate returns.
• The ETF offers exposure to investing in a low-risk, highly liquid instrument that tracks short-term interest rates effectively.
• It serves as a useful tool for managing short-term liquidity and parking funds.

Asset Allocation & Portfolio Composition

• The asset allocation of Kotak Nifty 1D Rate Liquid ETF comprises around 100% in cash & cash equivalents.
• Since its inception, the fund has delivered an annualised return of 6.88%. Returns can fluctuate based on changes in interest rates and market conditions.
• The fund has posted a 7.03% return on investment over the past year as of June 30, 2024, against the benchmark index’s yield of 6.87%.