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Shanthi Venkataraman

INVESTORS can stay with Kotak-30 Mutual Fund. The fund has performed well over the past year and would figure in the top quartile of the performance rankings in 2004 till date. But its performance over a three-year and five-year period lags that of other top-performing, diversified equity funds.

The performance took a sharp hit in 2000 and 2001, when it underperformed the Sensex by a good margin. It rebounded from 2002 onwards.

The fund's return of about 90 per cent in the bullish phase in 2003, was not as impressive as that of diversified equity funds such as HSBC Equity and strictly large-cap funds such as Franklin Bluechip, which doubled their NAVs.In 2004, however, performance across most Kotak funds has improved. Kotak 30 has managed to deftly manoeuvre the market through various correction periods.

With a return of about 15 per cent since January, it has outperformed the Sensex by a large margin.

Suitability: The fund has a mix of mid-cap and large-cap stocks. Its risk profile is, therefore, similar to that of other diversified funds. For first-time investors who are building their core portfolio, the fund should not figure among their top picks; diversified funds such as Franklin Bluechip and HDFC Top 200, which have a better track record may be considered ahead of Kotak-30.

Portfolio: The fund has acquired a more diversified nature, with the top three sectors accounting for 33 per cent of its assets.

Holdings in the IT and pharmaceutical sectors are above 10 per cent. Exposures to stocks are, however, concentrated, with top five stocks accounting for about 30 per cent of the assets. This is to be expected, as the fund limits its investment to only about 30 stocks, as its name implies.

The portfolio sports a number of popular mid-cap stocks such as Balrampur Chini, Andhra Sugars, Federal Bank, Siemens and Hughes Software to name a few. Mid-cap stocks account for about 30 per cent of the total assets.

Fund facts: Kotak-30 was launched in 1998. The fund has an asset base of about Rs 180 crore. It now offers dividend and growth options. The minimum investment amount is Rs 5,000. The fund manager is Rushabh Sheth.

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