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Kotak Equity Arbitrage Fund
(Open-Ended Equity Growth Scheme)

An open ended equity oriented scheme that aims to generate income and capital appreciation by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market and in debt and money market securities. The scheme evaluates the difference between price of a stock in futures and spot market and enters into only those trades where there is a potential arbitrage available. The fund manager may square off or roll over the positions depending on the opportunities available. The scheme is suitable for investors who have an investment horizon of 3 months and above and who want to participate in equity arbitrage market for returns better than cash funds.

Sept 29, 2005

Sajit Pisharodi, Deepak Gupta, Abhishek Bisen

Performance as on 28/02/2010

Portfolio as on 28/02/2010

Allocation Pattern

Dividends in the scheme

Corpus as on 28/02/2010

Close

Corpus - Rs. 709.44 Crores

Scheme Information Document

Application Form

Notices & Addendum

The scheme seeks to identify & take advantage of arbitrage opportunities in the market by buying cash equities and simultaneously selling the same stock in the futures market. With the increased volatility in the markets in the last couple of months scope for arbitrage has increased. As the scheme is long in cash equities, the scheme also receives the dividend on the concerned stocks apart from the arbitrage in the futures market. The equity status ensures that the returns to the investors are tax efficient, which in some cases can contribute additionally to the returns. The spreads have started showing signs of widening indicating that there are some arbitrage opportunities and will be there in the coming months. With the central bank reducing interest rates continuously to provide a boost to the economy, the returns from arbitrage funds can easily be expected to exceed that of liquid funds. Investors with a horizon of 3-6 months may ideally invest in the fund to generate returns better than the liquid funds.

Click here for Scheme Features

• Investment Objective
To generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and by investing the balance in debt and money market instruments.
• Investment Pattern	• Benchmark Index
The asset allocation under normal circumstances will be as follows: Equity and equity related instruments including derivatives : 65% - 90%. Debt and money market instruments including margin money deployed in derivatives transactions : 10% - 35%. The asset allocation under defensive circumstances will be as follows: Equity and equity related instruments including derivatives : 0% - 65%. Debt and money market instruments including margin money deployed in derivatives transactions : 35% - 100%. Note : [1] **Debt securities / instruments are deemed to include securitized debt and investment in securitized debt will not exceed 50% of the debt portion of the scheme. [2] The asset allocation as given under normal circumstances is indicative and may vary according to circumstances at the sole discretion of the Fund Manager. Review and rebalancing will be conducted when the asset allocation falls outside the range indicated above, within a reasonable period of time. [3]Defensive circumstances are when the arbitrage opportunities in the market place are negligible or returns are lower than alternative investment opportunities as per allocation pattern. The allocation under defensive considerations will be made keeping in view the interest of the unitholders.	CRISIL Liquid Fund Index.
• Investment Horizon	• Estimated Recurring Expenses	• Actual Expense Ratio
1 - 3 months	2.25%	Click Here To View
• Investment Options	• Dividend Frenquency
Growth, Dividend Payout, Dividend Re-Investment.	Monthly - Monday preceding the last Thursday of every calendar month.
• Minimum Investment	• Cheques / DD to be drawn in favour of
Initial : Rs. 5000/- Additional : Rs. 1000/- Systematic : Rs. 1000/-	Kotak Equity Arbitrage
• Minimum Redemption Size	• Payout Schedule
Rs. 1000/- or 100 units.	Transaction day + 3 working days.
• Cut off for Transactions
3 PM
• Entry Load	• Exit Load
Nil	For redemptions / switch outs (including SIP/STP) within 182 days from the date of allotment of units, irrespective of the amount of investment: 0.50%

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