The Hindu Business Line : Kotak Global India Fund: Hold

INVESTORS can hold on to their units in Kotak Global India Fund. The fund has turned in an impressive performance since its inception in January 2004. However, investors should evaluate the progress over the next year or two at least, before taking fresh exposures in the fund.

Suitability: The fund's objective is investing in the stocks of companies with a global presence, which might limit its investment set to a limited basket of stocks. The fund's exposure to mid-cap stocks is about 70 per cent of its total assets. It also takes concentrated exposures to sectors. These factors peg up the risk profile, in relation to a normal diversified equity fund. Investors may remain invested in the fund so long as it forms only a part of their overall portfolio. For investors making a beginning with equities, diversified equity funds with a long-term track record should be considered ahead of this fund.

Performance: The fund is among the top performing funds in the just-concluded quarter, managing to contain the decline in its net asset value to less than 4 per cent. Since inception, the fund has turned in a negative return of 5.6 per cent, outperforming the Sensex, which declined by 17 per cent. The performance of the fund also matches that of HSBC India Opportunities Fund and is superior to IL&FS Global India Fund.

The fund has handled the fall reasonably well, owing to its large holdings in the IT and pharma sectors, which have not fallen as sharply as the other sectors. However, the ability to deliver good returns on a consistent basis can be determined only after evaluating it over a three-to-five year period.

Portfolio: The top three sectors are pharma, IT and engineering. These sectors account for more than 50 per cent of the total assets. However, stock-specific exposures have been limited to 5-6 per cent each. The fund's cash position, which was higher at about 7 per cent in April, is now at about 5 per cent. The total assets managed declined by Rs 27 crore to Rs 260 crore in May; a part of this would be accounted for by the decline in NAV.

Fund facts: Kotak Global India is an open-ended equity fund. It was launched in January 2004. The fund comes with growth and dividend options. The minimum investment amount is Rs 5,000.

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Kotak Global India Fund: Hold