Kotak Floating Rate Fund-Reg(G)

Scheme Introduction:

Kotak Floating Rate Fund-Reg(G) is an open-ended floater fund designed for investors who want to invest in debt instruments where a meaningful part of the portfolio is linked to floating (resetting) interest rates. Floater funds need to invest minimum 65% in floating-rate instruments, which can help reduce interest-rate risk compared to pure long-duration fixed-rate debt, especially when interest rates are rising or volatile.

 

As of 1 Feb 2026, Kotak Floating Rate Fund-Reg(G) manages 3456 in assets, has a Yield to Maturity (YTM) of 7, and a Modified Duration of 767.

 

In simple terms: YTM indicates the portfolio’s current income potential, while modified duration shows how sensitive the fund is to interest-rate changes (lower is typically more stable for short-term parking).

Investment Objective:

The investment objective of Kotak Floating Rate Fund-Reg(G) is to generate reasonable returns by investing in a portfolio of floating-rate debt instruments (and other debt and money market instruments), in line with floater fund norms. Investors can typically invest and redeem on business days (subject to scheme cut-off timings and applicable exit load).

 

The current NAV of the scheme is ₹1575.57 as on 24 Mar 2026, and the risk level is Moderate.

Key Scheme Metrics:

Kotak Floating Rate Fund-Reg(G) was launched on 14 May 2019 and is benchmarked against Nifty Short Duration Debt Index. The scheme is managed by Deepak Agrawal who has been managing the fund since 9 May 2019 and the fund is also managed by Manu Sharma. The exit load of the fund is Nil.

Asset Type Allocation:

Kotak Floating Rate Fund-Reg(G) invests across floating-rate and short-term debt instruments to balance liquidity and yield. As of 28 Feb 2026, the portfolio is allocated to Corporate Debt (68%), Government Securities (12%), Certificate of Deposit (12%), PTC & Securitized Debt (6%).

 

A quick way to read this: higher floating-rate exposure generally means the fund’s income can adjust faster when interest rates change, while the rest of the mix helps manage liquidity and credit comfort, assuming credit quality stays strong.

Rating Allocation:

Credit quality matters the even in Floater. The fund’s portfolio is allocated 54% to AAA, 12% to SOV, 12% to A1+, 8% to AA, 6% to AAA(SO), 4% to AA+, 2% to AAA(CE).

 

In plain language: : the higher the share of top-rated and sovereign instruments, the more the fund is leaning toward safety and stability. For Floater and debt funds, credit quality is the most important filter, because one avoidable credit event can matter more than small return differences.

Top 5 holdings:

The top 5 holdings of the fund are 6.92% Power Finance Corporation Ltd.(^) (5.8%), 7.19% Karnataka State Govt - 2032 - Karnataka(^) (5.7%), 7.31% Tamil Nadu State Govt - 2033 - Tamil Nadu(^) (5.3%), 7.96% PIPELINE INFRASTRUCTURE LIMITED (5.2%), 6.95% REC LTD (5.1%)

 

In floater funds, large holdings are commonly floating-rate notes, bank/PSU issuances, and high-quality short-term instruments, chosen mainly for liquidity and credit comfort.

Top Sector Allocation:

Sector	Allocation (%)
"Finance	29%
Bank	17%
Finance Term Lending	14%
G-Sec	12%
Unspecified	11%

 

It is normal for floater funds to show meaningful exposure to banks and financial institutions, because floating-rate issuances and money market instruments often come from these segments.

Performance:

Kotak Floating Rate Fund-Reg(G)’s recent annualized returns are 7.1% (1 Year), 7.7% (3 Years) and 6.5% (5 years). Over 1 year, it has delivered 7.1% annualized returns. These returns are as of 25 Mar 2026

 

Against the full Floater fund peer set, the scheme is ranked 2/12 over 1 year, 2/12 over 3 years, 2/10 over 5 years period.

 

One simple way to interpret rankings: floater funds can show meaningful differences across peers because the proportion of floating exposure, credit profile, and maturity positioning can vary from fund to fund, so peer ranking is generally more useful.

How much money would you have made:

If you had invested ₹1,00,000 in Kotak Floating Rate Fund-Reg(G) then you would have got:

SIP Invested ₹1,00,000

Duration	Annualized Returns (%)	Current Total Value	Current Total Profit
1 Year	7.1%	₹107100.00	₹7100.00
3 Year	7.7%	₹107700.00	₹7700.00
5 Year	6.5%	₹106500.00	₹6500.00

Note: These are historical returns and they may not repeat in the future.

Also note for very short holding periods, exit load can impact realized returns. Always check exit load before investing in any fund. Data updated as of 25 Mar 2026

Debt quants:

The Potential Risk Class (PRC) matrix of Kotak Floating Rate Fund-Reg(G) is B-III which means that the fund has Relatively high interest rate risk and moderate credit risk.

Who should invest in Floater Funds?

It may suit investors who want to:

• Invest for a medium-term horizon (for example, 2–5 years)
• Prefer a debt fund that can potentially handle rising/volatile interest-rate environments better due to floating-rate exposure
• Seek steady accrual while being comfortable with some NAV movement due to credit spreads and interest-rate changes
• Build a higher-quality debt allocation rather than very short-term parking.

Benefits of investing in Floater Funds:

It offers a few practical benefits: professional management of floating-rate and high-quality debt instruments, easy entry/exit (subject to cut-offs and exit load, if any), and a structure that can potentially reduce interest-rate risk versus pure fixed-rate strategies. It can be useful for medium-term goals where investors seek steady accrual and are comfortable with some NAV movement.

Things to consider before investing in Floater Funds:

Floater funds are not risk-free. Key things to watch are credit quality (ratings mix), issuer concentration, the proportion of true floating-rate exposure, exit load/cut-off rules, and changes in YTM and duration. Floating-rate exposure can reduce interest-rate risk, but it does not remove credit risk, and NAV can still move due to spread changes and portfolio positioning. These funds are generally better suited for medium-term horizons rather than short-term parking.

Taxation of Floater Funds:

For Floater funds, taxation depends heavily on when you bought your units. Units acquired on or after 1 April 2023 are generally taxed as short-term capital gains at your slab rate and there are no long-term capital gain and loss benefits.

 

For units acquired before 1 April 2023, taxation follows the older capital-gains framework based on holding period and the date of sale.

 

Note that regulatory/tax updates over time can change how long-term treatment works.

Conclusion

Kotak Floating Rate Fund-Reg(G) is positioned as a higher-yield debt option that aims to deliver reasonable returns through a portfolio that can take higher credit exposure.

 

A simple way to track whether it is doing its job is to follow three live indicators: credit quality, peer ranking consistency, and monthly movement in YTM and modified duration. Among these, credit quality should always come first because protecting capital matters more than chasing marginally higher returns; focus on the rating mix (AAA/AA+/sovereign exposure), issuer concentration, and any meaningful shifts in the credit profile, and use returns/ranks mainly as a supporting check