NFO Launch: Momentum-Focused Equity Fund Targeting High-Growth Stocks Opens 29 July

The Kotak Active Momentum Fund is an open-ended equity scheme designed to generate long-term capital appreciation by investing in stocks demonstrating strong earnings momentum. Backed by Kotak Mutual Fund’s in-house enhanced earnings factor model, this fund identifies companies showing consistent growth in earnings per share (EPS) and favourable analyst upgrades. The NFO employs a disciplined, research-driven strategy focusing on high-quality stocks from the top 250 listed companies, aiming to create a diversified portfolio of 40–50 equity holdings. It is suitable for investors looking for sustained capital growth by tapping into earnings-led stock momentum rather than just price trends.

Key Features of Kotak Active Momentum Fund

• Opening Date: July 29, 2025
• Closing Date: August 12, 2025
• Exit Load: To be indicated separately by the fund house
• Minimum Investment Amount: ₹5,000 (lump sum); ₹500 for SIP (minimum 10 instalments)

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Objective of Kotak Active Momentum Fund

The Kotak Active Momentum Fund - Direct (G) aims to provide long-term capital growth by investing primarily in equity and equity-related securities that display momentum characteristics—particularly earnings momentum. This is achieved through a proprietary, data-backed model designed to identify stocks with improving earnings and favourable analyst views.

Investment Strategy of Kotak Active Momentum Fund

• Focuses on stocks with earnings momentum rather than just price momentum
• Portfolio includes 40–50 high-quality stocks selected from the top 250 companies by market capitalisation
• Uses a proprietary enhanced earnings factor model
• Stocks are filtered based on EPS growth, sales momentum, and analyst upgrades
• Actively monitored and rebalanced to adapt to market changes

Risks Associated with Kotak Active Momentum Fund

• Thematic equity investing is subject to market volatility
• Momentum-based strategies may underperform during periods of market consolidation
• The model relies on accurate earnings forecasts and analyst ratings, which are subject to change
• Concentration in selected momentum stocks may result in underperformance if trends reverse
• No guarantee that the fund’s objective will be achieved

Risk Mitigation Strategy by Kotak Active Momentum Fund

The NFO incorporates a diversified investment framework, reducing exposure to poorly performing stocks by filtering them out based on robust quantitative and qualitative parameters. The fund uses data science and a proprietary model to dynamically reassess portfolio components, allowing for early identification of declining momentum. By focusing on companies with solid fundamentals and earnings visibility, the NFO aims to mitigate downside risk and maintain stability across market cycles. Regular rebalancing further helps reduce exposure to underperformers and capture emerging opportunities.

What Type of Investor Should Invest in Kotak Active Momentum Fund?

• Investors aiming for long-term capital growth
• Those comfortable with moderate to high risk levels
• Individuals looking to gain exposure to a momentum-based investment strategy
• Investors seeking actively managed equity exposure focused on earnings strength
• Suitable for informed investors who understand equity market behaviour and volatility

Where Will the Kotak Active Momentum Fund Invest?

• Primarily in equity and equity-related instruments showing earnings momentum
• Stocks selected from the top 250 companies by market capitalisation
• Companies with improving EPS, supported by strong analyst ratings
• Securities that demonstrate positive earnings surprises or upward revisions
• Equity assets are diversified across sectors to manage concentration risk