Description

KOTAK Asset Management announces scheme name changes and recategorization of six Fund of Fund schemes effective August 30, 2025.

Summary

Kotak Mahindra Asset Management Company Limited announces the recategorization and name changes of six Fund of Fund (FoF) schemes effective August 30, 2025, following SEBI’s new framework for FoF schemes with multiple underlying funds aimed at enhancing transparency and risk alignment.

Key Points

  • Six KOTAK Fund of Fund schemes will be renamed and recategorized
  • Changes follow SEBI circular SEBI/HO/IMD/IMD-RAC-1/P/OW/2025/4102/1 dated February 6, 2025
  • New framework introduces enhanced transparency and risk alignment for FoF structures
  • Board approval obtained from both Kotak Mahindra Asset Management Company Limited and Kotak Mahindra Trustee Company Limited
  • Kotak Multi Asset Allocator Fund of Fund-Dynamic will remove overseas fund investment capability

Regulatory Changes

  • Implementation of SEBI’s Framework for launching Fund of Fund (FoF) schemes with multiple underlying funds
  • New sub-categorization system for different types of FoF schemes:
    • Overseas FOF - Thematic Based Equity FOF
    • Overseas FOF - Country specific Equity FoF
    • Hybrid FoF (Domestic) - Income Plus Arbitrage FoF
    • Hybrid FoF (Domestic) - Multi Asset Allocation FOF

Compliance Requirements

  • Scheme name changes must be implemented by August 30, 2025
  • Updated investment objectives and asset allocation patterns must be followed
  • Kotak Multi Asset Omni FOF will no longer invest in overseas funds/ETFs
  • New asset allocation limits: Equity schemes (10-80%), Debt schemes (10-60%), Gold ETF schemes (10-30%)

Important Dates

  • August 30, 2025: Effective date for all scheme name changes and recategorization
  • February 6, 2025: SEBI circular issuance date
  • June 30, 2025: AMFI communication date

Impact Assessment

Investor Impact: Moderate - existing investors will see scheme name changes but fundamental investment strategies remain aligned. The removal of overseas investment capability from one scheme may affect investors seeking international exposure.

Operational Impact: Medium - requires system updates across BSE StAR MF platform and investor communication regarding name changes. Enhanced transparency framework should improve investor understanding of FoF structures.

Impact Justification

Affects multiple mutual fund schemes and investor understanding but represents administrative changes rather than material operational impact