NFO Opens:31 Dec. 2010

NFO Closes:14 Jan. 2011

Performance of Various Asset Classes

Returns are as on November 30, 2010. Returns <=1year: Absolute, Returns > 1 year:- Compounded Annualised Growth Rate (CAGR). BSE SENSEX represents equities and CRISIL Short Term Bond Index represents Debt.Source: ICRA MFI, Bloomberg.

Debt as a category tends to give stable returns with relative safety. Gold has been a good performer in the recent past due to the impact of global economic turbulence. Equitiestend to outperform other asset classes in the long term.

Returns (%)

Asset Classes in Various Economic Scenarios

Various asset classes perform differently in various economic cycles henceit is very difficult for investors to choose the right asset class at the right point of time.

Source: Internal Analysis.

EquitiesSENSEX - 19000

SENSEX - 15000

Debt10 year – 7.25%

10 year – 8.00%

The Investment Conundrum

With the availability of multiple asset classes and the constant news flow surrounding these assets, one often wonders where to invest.

Rs. 20,000 per 10 gms

Rs. 16,000 per 10 gms

Gold

The Investment Conundrum

EquitiesHaving bounced back from the 2009lows, equities are again reeling underthe pressure from the contagion riskemanating from the debt crisis in theEuro Zone region. Also the risinguncertainty in the domestic politicalsector ,too, is weighing-in on market.

GoldGold has been a good performer witheconomic turbulence setting in. At the sametime gold prices are trading at all time highlevels.

DebtGiven the demand supply equation,expectation of easing inflation and reducingfiscal deficit, the yields are expected tomoderate eventually in medium term. Thereare also several high accrual opportunitiesavailable.

Source: Internal Analysis.

Debt is relatively a safer option but not enough to create

wealth.

Where to Invest?

Risk aversion is back given the current global economic scenario, hence equities are perceived to carry higher risk than other asset classes. At the same time, one wants to partake the growth potential that equities can provide.

Gold has run up significantly in recent times, yet considered a

safe haven during economic turbulence.

In such a scenario, there is need for a product which offers

stability of debt, growth potential of equities and at the same

time diversification.

Presenting…

Kotak Multi Asset Allocation FundThe scheme aims to generate income by predominantly investing in debt and money

market instruments, growth by investing moderately in equities and overall diversification

by investing in gold.

The scheme aims to invest at least 75% to 90% in debt and money market instruments,

5% to 20% in equity and equity related instruments and 5% to 20% in gold.

The scheme will take exposure to gold through Gold Exchange Traded Funds (ETF).

Does Gold Add Value?

The graph below shows comparative returns on various hypothetical portfolioswith gold as compared to traditional Monthly Income Plans (MIP) which invest onlyin debt and equity. It can be seen that portfolios with random varying exposure togold have outperformed CRISIL MIP Blended Index across time horizons.

Returns are as on Nov 30, 2010, Returns<=1yr: Absolute; Returns > 1 yr: Compounded Annualised Growth Rate (CAGR). The above returns are computed using historical data and are for illustrative purposes only. There is no assurance or guarantee from anyone that these returns will be achieved. (Source: ICRA MFI).

BSE SENSEX represent equities, CRISIL Short Term Bond Index represent debt and CRISIL MIP Blended Index represents MIP. Landed price of gold in Indian Rupees represent Gold.

The above asset mix is for illustrativepurposes only. The fund manager mayor may not invest in the aboveproportion.

(%)

Does Gold Add Value?

Source: Bloomberg & ICRA MFI. CRISIL Liquid Index Fund, CRISIL Composite Bond Index & CRISIL Short Term Bond Fund Index represent money market, long term debt & short term debt respectively.

In addition to generating higher returns, Gold has a very low or negative co-relation with other asset classes. This means that Gold is an effective diversification tool.

GOLD (INR) CORELATION WITH OTHER ASSET CLASSES

Correlation of daily returns from Nov 2002 to Nov 2010

Correlation

Asset Classes

Risk-Return Positioning

Kotak Multi Asset Allocation has a risk-return profile of MIPs with better return potential with relatively lower risk.

The objective of the scheme may or may not be achieved.

Fund Facts

Fund Facts

Risk Factors - Standard

Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk,liquidity risk, default risk including the possible loss of principal.

As the price / value / interest rates of the securities in which the scheme invests fluctuates, the value ofyour investment in the scheme may go up or down. The value of investments may be affected, inter-alia,by changes in the market, interest rates, changes in credit rating, trading volumes, settlement periodsand transfer procedures; the NAV is also exposed to Price/Interest-Rate Risk and Credit Risk and may beaffected inter-alia, by government policy, volatility and liquidity in the money markets and pressure onthe exchange rate of the rupee

Past performance of the Sponsor/AMC/Mutual Fund does not guarantee future performance of thescheme.

Kotak Multi Asset Allocation Fund is only name of the scheme does not in any manner indicate either thequality of the scheme or its future prospects and returns.

The sponsor is not responsible or liable for any loss resulting from the operation of the scheme beyondthe initial contribution of Rs.2,50,000 made by it towards setting up the Fund.

The present scheme is not a guaranteed or assured return scheme.

Risk Factors – Scheme Specific

• The Portfolio of the Scheme will comprise predominantly of Debt and Money Marketinstruments issued by Corporates, and to a lesser extent those issued by Central or StateGovernments. As such, there would be Moderate Credit Risk. Equity and Equity RelatedInstruments by nature are volatile and prone to price fluctuations on a daily basis due tomacro and micro economic factors. Gold ETFs in which the Scheme will invest will beinvesting in physical gold and gold related instruments, the NAV of the underlying scheme aswell as this Scheme will react to the price of gold. The funds in which the Scheme investsmay not perform in line with the market and may also not achieve its investment objective.In such a situation, the performance of the Scheme could be affected and its ability toachieve its investment objective may be impaired.

• General Risk Factors: Mutual Funds and securities investments are subject to marketrisks and there is no assurance or guarantee that the objective of the Scheme will beachieved. As with any securities investment, the NAV of the Units issued under theScheme can go up or down depending on the factors and forces affecting thesecurities market. Past performance of the Sponsor/AMC/Fund or that of any scheme of theFund does not indicate the future performance of the Schemes of the Fund.

• Kotak Multi Asset Allocation Fund is only the name of the Scheme and does not inany manner indicate the quality of the Scheme, future prospects or returns.

• Investment Manager: Kotak Mahindra Asset Management Company Ltd.

• Sponsor: Kotak Mahindra Bank Ltd. (liability ` Nil).

• Trustee: Kotak Mahindra Trustee Company Ltd. Kotak Mahindra Bank Limited is not liable orresponsible for any loss or shortfall resulting from the operations of the Scheme.

• Please read the Scheme Information Document (SID) and Statement of AdditionalInformation (SAI) carefully before investing. SID and SAI are available onmutualfund.kotak.com

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