Master And Student - All About Stock Markets

Kotak Mutual Fund is launching a new open-ended scheme Kotak Nifty ETF. The scheme is like any another Nifty ETF, floating in the market. The investment objective of the fund is to provide returns that closely correspond to the total returns of the S&P CNX Nifty.

The Indicative allocation is 90 to 100% in the stocks comprising S&P CNX Nifty and 0 to 10% in Debt and Money market instruments. The units of the scheme will be listed on NSE and Investors can buy or sell units on the stock exchange.


The minimum investment amount during new fund offer is Rs.10,000 and in multiples of further purchases can be made once the units are listed on the exchange.The nav of the units is closely related to value stocks that form a part nifty.

We already have similar schemes like Nifty Bees and couple of other similar schemes listed. You can read more about at What is Nifty Bees and the Update.

What should investors do?

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Indian Stock Markets have started the year 2010 on a positive note. After a stupendous rise of 80% over the past year , what's in store for Indian Markets this year? Moving into 2010 , Sensex at 17,000 levels, most positives based on FY10E earnings are firmly in the price. The risk-reward is not in favor buying heavily into equities, atleast in the index stocks.

Having said that, in the near term, markets would look forward to the upcoming results season for clues into future corporate profit growth. Indian economy's fundamentals should strengthen further as we move into CY10 and momentum in GDP growth should likely gain steam. This should keep the foreign investors interested in the India story.

Currently India trades at trailing P/E of 19 times of current year earnings. Historically markets have gone upto 20/21 times of current year's earnings, which can propel the Sensex to higher levels of about 18500/19000. And only during bubble times, markets have traded above 30 P/E. which is unlikely.

The key risks for our markets are higher interest rates triggered by rise in inflation, global uncertainties on monetary and fiscal tightening. Any sharp interest rate hike in U.S and in India, could trigger the anticipated correction.

Hence the rally is likely to continue, optimism needs to be backed by higher earnings visibility for FY11 and also earnings upgrades. We can expect market gains to be moderate after a strong 2009.

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