Kotak Mutual Fund (MF) investors can now redeem a part of their investments in select schemes on a monthly basis, under a new window called Long Term Income (LTI) facility.
The facility is applicable to investors of Kotak Income Opportunities Fund, Kotak Medium Term Fund, Kotak Equity Savings Fund, Kotak Monthly Income Plan and Kotak Bond Fund on investments made on or after June 1, 2016, under the growth option.
An investor should have put in at least Rs. 2 lakh to avail the facility, Kotak Mahindra Asset Management Company (KMAMC) said in a statement on Thursday.
"The launch of Long Term Income (LTI) facility (is) to meet the need for predictable, long term, cash-flow requirement of investors. On a monthly basis, investors can redeem 0.75% of their investments at the prevailing Net Asset Value (NAV)," KMAMC said in the statement.
"Investors who are in need of regular cash flow and also, investors who are looking to generate a second source of cash flow apart from their primary source of income, such as salary or business income; can benefit from the Long Term Income (LTI) facility," Lakshmi Iyer, Chief Investment Officer (Debt) & Head Products at KMAMC, said in the statement.
Investors availing the LTI facility can redeem up to 10 percent of the initial investment amount within one year, without any exit load. The 10 percent limit is applicable for Kotak Income Opportunities Fund, Kotak Equity Savings Fund and Kotak Monthly Income Plan.
In case of Kotak Medium Term Plan, investors can redeem up to 15 percent of the initial investment amount within 18 months, without any exit load. There is no exit load for Kotak Bond Fund.
KMAMC, a wholly-owned subsidiary of Kotak Mahindra Bank (KMB), is the asset manager for Kotak Mahindra Mutual Fund (KMMF).