The Hindu Business Line : Kotak Mid-Cap — Drawn to metals, software

Mid-cap stocks had a dream run over much of the past year. However, most diversified funds have now shuffled their portfolios and moved out of the mid-cap space or reduced their exposure to this segment.

A fund with a strategy to invest at least 65 per cent in the mid cap stocks is Kotak Mid-Cap Fund.

In the quarter ended June 2006, it had 44 stocks in its portfolio. Ferrous metals replaced capital goods at the top slot in terms of sectoral asset allocation.

Other sectors accumulated in the same period were pharmaceuticals, hotels and software.

The sectors that underwent pruning were consumer non-durables, capital goods, industrial products and banks.

Ferrous metals stocks, which have came down from their peak levels, were added to the portfolio.

The new entrant to the portfolio was Kamdhenu Ispat. Jindal Steel and Power, Maharastra Seamless and Tata Metaliks were added to the portfolio, while exposures to JSW Steel and Monnet Ispat and Energy were pared.

In the pharmaceuticals space, the fund booked profit partially in Aventis Pharma and Alembic.

The lone stock to enter the portfolio was IPCA Laboratories. The fund found software stocks a defensive bet and increased the exposure to the sector. Mphasis BFL and Sasken Communication Technologies were new entrants. However, exposure to the stock of Allsec Technologies was reduced.

EIH and TajGVK Hotels continue to find space in Kotak Mid-Cap's portfolio, though a 22 per cent chunk of the fund's holding in EIH was offloaded.

Capital goods stocks, underwent a re-jig. The fund partly liquidated its holding in Alstom Projects, Bharat Earth Movers and Aban Lloyd Chiles Offshore. But it found Hindustan Dorr-Oliver attractive enough to increase its holding in the stock three-fold. Holdings in the consumer non-durables segment were also shuffled, but the sector still corners 13.2 per cent of the fund's assets.

The fund booked profit partially in sugar stocks such as EID Parry India and Ugar Sugar Works. Holdings in Britannia Industries and Hindustan Sanitaryware & Industries stocks were trimmed.

Fund Facts: Kotak Mid-Cap was launched in February 2005 and is managed by Mr Anand Shah.

Suresh Parthasarathy

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