Kotak NASDAQ 100 Fund of Fund NFO – Should you invest?

Kotak NASDAQ 100 Fund of Fund NFO – ReviewKotak NASDAQ 100 Fund of Fund NFO – Review


Kotak Mutual Funds has launched NASDAQ 100 Fund of Fund. This New Fund Offer would open for subscription on 11th January, 2021. This is an open ended mutual fund that would invest in overseas ETFs and/or Index funds that would invest in the NASDAQ 100 Index. Since it invests in other ETFs or Index funds, it is termed as fund of fund. Should you invest in Kotak NASDAQ 100 Fund of Fund NFO? What are the various risk factors associated with such funds?

Also Read: Best Performing International Mutual Funds in 2021

Issue details of Kotak NASDAQ 100 Fund of Fund (NFO)

This is an open-ended equity mutual fund scheme. Here are the NFO issue details.

Kotak NASDAQ 100 Fund of Fund – NFO Issue Details
Scheme Opens 11-Jan-21
Scheme Closes 25-Jan-21
Scheme reopens for continous purchase/sale 09-Feb-21
Minimum investment (Lumpsump) Rs 5,000
Minimum investment (SIP) Rs 1,000 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load Nil
Risk High Risk
Max Total expense Ratio (TER) 1.00%
Benchmark NASDAQ 100 Index
Fund Manager Mr Devender Singhal
Mr Satish Dondapati
Mr. Abhishek Bisen (Debt)

Download Kotak NASDAQ 100 Fund of Fund SID

What is the investment objective of this MF scheme?

The investment objective of this fund is to provide long term capital appreciation by investing in overseas units of ETFs and/or index fund based on the NASDAQ 100 Index.

There is no assurance or guarantee that the investment objective of the scheme will be realized.

What is the allocation pattern in this mutual fund?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Units of Overseas ETFs or Index Fund based on NASDAQ 100 Index 95% 100% High
Debt Schemes, Debt and Money Market Instruments 0% 5% Low to Medium

Why to invest in the Kotak NASDAQ 100 Fund of Fund NFO?

Here are a few reasons to invest in such mutual fund schemes.

1) This fund would invest in overseas ETFs and index funds that invests in the NASDAQ 100 Index. NASDAQ 100 Index has outperformed in the last 5-10 years (20%+ annualized returns), hence investing in such index would provide superior returns to investors.

2) This fund invests in ETFs/Funds that invest in US NASDAQ 100 companies. Investors can get overseas investment exposure, which they would be investing in major companies like Google, Facebook, Amazon, etc., that are part of the NASDAQ 100 index.

Some key risk factors you should consider before you invest in such funds

One should consider some of these risk factors / negative factors before investing.

1) This fund would invest in ETFs and Index funds based on NASDAQ 100 Index stocks. It is immaterial whether the underlying companies are doing good or not, such fund might invest in the underlying stocks of the index. If the underlying stocks are not good or underperforms, it would affect the returns.

2) This fund invests in the NASDAQ 100 index companies. Investments in overseas countries would have currency risk and geopolitical risks.

3) It invests some part in debt instruments which are turned to be high risk these days.

4) You can refer complete risk factors in NFO Scheme Information Document.

Performance of underlying ETFs / Index Funds

This fund would invest in existing ETFs and index funds. Here is the performance of respective ETFs / Index Funds.

1) iShares NASDAQ 100 ETF USD Acc

1 Year returns – 48%

3 year annualized returns – 27%

5 year annualized returns – 24%

10 year annualized returns – 20%

2) Lyxor NASDAQ 100 ETF Acc

1 Year returns – 33%

3 year annualized returns – 24%

5 year annualized returns – 22%

3) USAA NASDAQ 100 Index Fund

1 Year returns – 47%

3 year annualized returns – 25%

5 year annualized returns – 25%

10 year annualized returns – 19%

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Should you invest in the Kotak NASDAQ 100 Fund of Fund NFO?

Kotak NASDAQ 100 Fund of Fund invests in overseas ETFs and/or index funds that are investing in the NASDAQ 100 Index. I have recommended earlier several times to invest in Motilal Oswal NASDAQ ETF that outperformed in the last 5-10 years. Its 1 year returns is 45%, 5 year annualized return is 25% and 9.8 years annualized returns is 24.6%. Last 1 year performance is high and investors should not assume similar returns in future. While both funds invests in the NASDAQ 100 index, Motilal Oswal NASDAQ 100 ETF invests directly in this index, whereas Kotak NASDAQ 100 FoF would invest in ETFs and index funds that invests in the NASDAQ 100 index. Beyond this, there is no other major difference. High risk investors can invest in this new fund for 5-10 years time frame. Moderate to low risk investors should avoid such funds.

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12 thoughts on “Kotak NASDAQ 100 Fund of Fund NFO – Should you invest?”

  1. Please provide Step by step procedure to purchase SIP in Kotak NASDAQ 100 Fund.I don’t want to do through demat account. I had already invested in SIP for Kotak Standard Multicap Fund – Growth (Regular Plan).So i don’t need any other registrations.

    1. Hello Teny, If you are investing through any App/MF broker login, you need to visit new fund offer section and then select this fund and invest. If you are investing directly on AMC website, login to the website and visit NFO section and select this fund and invest.

  2. For Insurance for Child / and Pension plan with comparison if not LIC what else plan will be good Can You Please Post

  3. Compared to motilal Nasdaq fund that directly invests in Nasdaq shares, Kotak will invest in funds that invest in Nasdaq shares. Does this imply Motilal will have slightly superior returns considering each intermediary fund will have its entry / exit load?

    1. Hello Dr. Sandeep, Yes. But one need to check the underlying ETFs also their investmnet objective and whether they invest in debt portion to some extent.

  4. why kotak cannot directly invest like motilal? Ultimately there is double risk here, one the expertise of original fund investor and second that of Kotak guys.
    Are there any other funds who do this piggybacking thing 🙂

    1. I really don’t know the reason behind this. Even Motilal Oswal has both ETF (one need to have demat account( as well as fund of fund (one need not have demat account)

      1. I just want to invest in a fund that directly tracks NASDAQ index alone..not interested in a fund that invests in debt funds! Where would you suggest me to invest in? Kotak or Motilal oswal?

        What’s the difference between ETF and FoF ?? Can you please elaborate and suggest which is better (whether to go with demat or without demat) and its pros/cons?

        1. If your objective is just NASDAQ 100 Index, just go for Motilal Oswal NADAQ 100 ETF. If you do not have demat account, then go for Motilal Oswal NASDAQ 100 Fund of Fund. This ETF would invest in underlying securities and if index goes up, the value of ETF goes up and versa. This does not invest in any bonds / debt instruments of NASDAQ 100, but only in the shares.

          1. Thanks for your reply!

            I do have demat account elsewhere but not in MO. Do I need to have one in MO for investing in this?

            You also said (in the post) that we can invest without demat too. How do to that? And which is better – with demat in MO or without demat? Would appreciate your reply!

          2. Best way to invest in mutual funds is regular way and not through demat account as there are transaction charges and commission on each purchase. You can directly visit motilal oswal mutual fund website, register, login and invest. Alternatively you can open mutual fund account with Mycams, Groww, ICICIdirect etc., and then invest

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