MUMBAI, SEPT 17: Kotak Mahindra Asset Management Company Ltd has announced the launch of K Gilt Serial Plan that eliminates both credit and price risk associated with a mutual fund thereby giving it the flavour of an assured return scheme.With the introduction of a series of plans with consecutive maturities under its government securities fund, K-Gilt, the fund has effectively nullified price risk for an investor who stays with the fund till maturity.Announcing this at a press conference here today, Kotak Mahindra AMC chief executive officer Shekhar Sathe said that the series of plans, K-Gilt 2001, K-Gilt 2003, K Gilt 2005 up to K-Gilt 2019 investing in government dated securities with similar maturity is more indicative of the return at the end of that period."Investors can know what returns to expect at maturity by deducting 0.6 per cent (the costs to the fund) from the yield on the gilt-edged security of a given maturity," he said, adding that costs to K-Gilt serial plan, being a passive portfolio, were the lowest in the industry.In today's market, the yield on 2003 (growth option) government paper would be around 10.70-10.85 per cent and accordingly, the returns on a K-Gilt 2003 would be around 10.15 per cent per annum. People who opt for dividend would earn a return of about 9.15 per cent per annum tax-free. For individual investors in the highest tax bracket, this works out to an equivalent pre-tax return of about 13.60 per annum, he said.The K-Gilt corpus, currently around Rs 470 crore, is expected to increase to Rs 2000 crore over the next three years, Sathe added.
