Kotak Mahindra Asset Management Company has started the NFO for its new Nifty 500 Index Fund, which remains open until October 19, 2026. The fund provides passive exposure to 500 Indian companies, covering approximately 87% of the total market capitalization.
Kotak Mahindra Asset Management Company has introduced its Nifty 500 Index Fund, a new passive investment product available for subscription starting October 5, 2026. The New Fund Offer (NFO) will close on October 19, 2026, allowing investors to participate in an index that tracks 500 large, mid, and small-cap companies listed on the National Stock Exchange.
The fund aims to mirror the performance of the Nifty 500 index, which represents approximately 87% of India's total listed market capitalization. This strategy offers a different approach compared to popular Nifty 50 or Nifty Next 50 funds, as it provides a single portfolio covering a wider spectrum of the market rather than limiting exposure to just the top 50 or the next 50 companies.
The fund management team includes Satish Dondapati, Jeetu Valechha Sonar, and Abhishek Bisen. Investors can apply with a minimum lump sum amount of ₹1,000, while those choosing a Systematic Investment Plan can start with ₹500, provided they commit to at least two installments. The tentative date for the allotment of units is October 26, 2026.
Passive funds like this do not aim to outperform the benchmark; instead, they seek to match its returns. Investors should note that the fund's returns will be slightly different from the index due to tracking error and management expenses. Because the Nifty 500 includes a significant number of mid and small-cap stocks, the portfolio may experience higher volatility compared to funds focused exclusively on large-cap companies. The final returns will depend on the movement of the underlying companies in the index.
Investors interested in passive strategies may track the fund's tracking error and expense ratio once it begins trading. The primary goal of such funds is to provide long-term exposure to the broader market, making it important for investors to understand the risks associated with market cycles and potential volatility inherent in a diverse basket of companies.