The Hindu Business Line : Kotak Lifestyle: Riding on consumerism

Over the last few years, the increased earnings potential of the Indian public has led to higher disposable income levels, especially in the middle-income group. This has opened up new products and services that, in turn, drive consumer spending. As a result, many mutual funds have spotted investment opportunities in companies that ride the consumer wave.

Kotak Lifestyle is one such fund, with the objective of generating returns by investing across companies that are likely to benefit from changing lifestyles and rising consumerism.

In March-May 2007, the fund's NAV grew 14 per cent, while the asset size declined by the same percentage. Exposure to consumer non-durables was brought down substantially, from one-fifth of the portfolio to 13 per cent. The fund pruned exposures to ITC, United Spirits, Asian Paints, Radico Khaitan and Nitco Tiles. McDowell Holding was the new addition.

The fund appears to have taken a cautious stand on media after the sector witnessed several stocks climbing northward in a short time. The fund may have booked profits as it pared exposures to stocks such as Jargan Prakashan, Television Eighteen, Zee Entertainment Enterprises and Zee News. Adlabs Films and Wire and Wireless India were however, added.

Holdings in telecom stocks Bharti Airtel and Reliance Communication were substantially pruned. The sector, however, continued to enjoy the same weight as a percentage of total assets, as the stocks gained during the period.

The banking segment underwent a minor rejig in the portfolio. ICICI Bank's weight in the portfolio was lower, ahead of the company's follow-on public offer. Centurion Bank was pruned, while frontline stock HDFC Bank grew almost 135 per cent.

The fund stepped up the exposure to the hotel sector, accumulating Royal Orchid Hotels. Indian Hotels stayed in the portfolio, unchanged.

In the financial services space, the weight of HDFC and Network 18 Fincap was reduced after Reliance Capital was added afresh.

Fund facts: The fund was launched in January 2006 and had Rs 335 crore of assest under management as on May 2007. Mr Nikunj Doshi manages the fund.

Suresh Parthasarathy

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