Kotak Mahindra Mutual Fund limits subscription of units of Kotak Small Cap Fund

One more fund house has chosen to limit inflows into small cap fund. After SBI, Nippon India and SBI Mutual Fund, Kotak Mahindra Mutual Fund (KotakMF) decided to restrict the lumpsum investments in Kotak Small Cap Fund (KSF) to Rs 2 lakh per PAN per month. The fund house has also restricted investments in KSF through systematic investments.

The fund house in the addendum dated February 26, 2024 has announced that lumpsum investments as well as additional investments or switch-in requests in the scheme is capped at Rs 2 lakh per PAN per month. In case of systematic investment plans (SIP) and systematic transfer plan (STP) the inflows are capped at Rs 25,000 per PAN per month for all frequencies.

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The Limits for various frequencies will be as under:
Daily SIP/ STP-in: Rs. 1,250/-
Weekly SIP/ STP-in: Rs.6 ,250/-
Monthly SIP/ STP-in: Rs.25,000/-
Quarterly SIP/ STP-in: Rs.75 ,000/

The fund house has made it clear that the restrictions are not applicable to SIP or STP registered prior to issuance of the addendum. The restrictions come into effect from March 4, 2024. There are no restrictions on redemption of units of KSF.

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Earlier in July 2023, Tata Small Cap Fund and Nippon Small Cap Fund had restricted inflows. The small cap funds are hot favourite of investors. As per data releases by Association of Mutual Funds in India (AMFI) the small cap funds as a category has seen net inflows of Rs 41,035 crore in CY2023. KSF is the sixth largest small cap fund in the Indian mutual fund industry and manages assets worth Rs 14,426 crore. Harish Bihani has been managing this scheme since October 2023. Earlier this scheme was managed by Pankaj Tibrewal. Scheme has given 39.33% returns in last one year compared with 56.95% returns given by Small Cap funds on an average, as per Value Research.