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Kotak Mahindra launches Sensex ETF feeder


Kotak Mahindra UK has launched a feeder fund to allow international investors to access the Kotak Sensex ETF, an India domiciled fund. 

The US dollar denominated Kotak Sensex ETF feeder is Mauritius-domiciled and managed by Kotak Mahindra UK.

The ETF is managed by Kotak Mahindra Asset Management. It is listed on the Bombay Stock Exchange and aims to provide returns that closely correspond to the total returns of the BSE Sensex. 

The feeder shall be predominantly invested in units of the underlying domestic fund, which closely tracks the performance of the BSE Sensex.

Shyam Kumar (pictured), director and chief executive of Kotak Mahindra UK, says: "The Sensex, the flagship index of the Indian capital markets comprising 30 large and liquid companies in prominent sectors of the fast-growing Indian economy, has given 77.81 per cent returns year to date. The Sensex represents about 44 per cent of the total market cap of BSE and the BSE represents over 99 per cent of the total listed market capitalization of the country as of  November 2009). This feeder fund thus provides an effective solution for long-term investors seeking to play the India growth story at a significantly lower cost compared to actively managed funds.

“Also, certain stocks in the Sensex may not be accessible to foreign investors due to these stocks having reached capacity on foreign institutional investor ownership. However, the feeder fund invests in an onshore fund that is not subject to such limits. Thus, a foreign investor can get full exposure to the Sensex.”

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