The Hindu Business Line : Kotak-30: Invest

EXPOSURES may be considered in Kotak-30, as the fund's performance remains impressive and it is showing a higher degree of consistency than a few years ago.

The sector and stock preferences appear well positioned to capitalise on growth opportunities and to contain risks in any choppy phase in equities.

We had indicated a buy last September and the performance since then only strengthens the case for exposures in the fund.

Investors could, however, make use of the systematic investment plan spread over a six-to-twelve month period.

This will enable them to capitalise on any market downtrend. A systematic investment plan over the past five years would have offered annual returns of about 50 per cent.

This is considerably higher than the fund and its benchmark indices notched up over the period.

The fund has generated returns of 28 per cent over the past five years. The NAV has offered annual returns of 60 per cent over the past year as well in a three-year period. It has outpaced its benchmarks — the Nifty and the Sensex — comfortably.

The fund invests in a maximum of 30 stocks and usually holds about 25.

This has, however, not led to concentrated exposures to any stock. The allocation to individual stocks is 1-7 per cent. The compact portfolio reduces the number of correct calls the fund has to make.

The fund has a small asset base of less than Rs 300 crore. This is also a positive, as it provides for a high degree of flexibility for management.

Suitability: Kotak-30 has a diversified portfolio; the risks are in line with what one would expect in such diversified funds, and the returns have more than adequately compensated for the risk element.

This fund still does not, however, figure among our top preferences. Investors who have exposures in funds such as HDFC Equity, HDFC TaxSaver, Franklin Prima and Magnum Contra can consider adding this fund to their portfolio.

Portfolio overview: The fund has picked engineering and IT as its preferred sector plays. These two sectors account for about 30 per cent of assets. The fund has opted for frontline stocks in these two sectors.

The likes of Siemens, Larsen & Toubro and BHEL, which have delivered attractive gains in recent months, figure prominently among the top holdings.

The fund has invested about 10 per cent of assets in mid-cap stocks. Deccan Chronicle, Navin Flourine, Television Eighteen and EID Parry are its core holdings in the mid-cap space.

Fund facts: Kotak-30 was launched in December 1998. The minimum investment is Rs 5,000. There is an entry load of 2.25 per cent on the NAV. There is no exit load.

The fund has delivered annual returns of about 60 per cent and 50 per cent over the past year and three years respectively.

The fund manager is Mr Anand Shah.

More Stories on : Mutual Funds | Recommendation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page