The Hindu Business Line : Kotak Opportunities Fund: Many structural changes

Kotak Opportunities invests predominantly in large-cap (greater than Rs 7,500-crore market cap) stocks. Small and mid-cap stocks, nevertheless, account for 15 per cent of the portfolio.

Over a one and three-year period the fund has comfortably managed to beat its benchmark S&P CNX 500. The fund features as many as 50 stocks across 20 sectors, sporting a fairly diversified portfolio.

During the past year the fund’s corpus grew by 265.8 percent, while the NAV grew by 35.9 percent. This indicates net inflows in the fund.

Sector moves: A comparison of the sector holdings now and a year ago reveals many structural changes. Software, the top holding a year ago, has seen exposures pared to half.

Telecom services also saw substantial trimming of exposures. Both these sectors did not receive much favour on macro and regulatory aspects over the past year.

But media, which had a good year and was among the top sectors held, has seen exposures reduced to a fifth of earlier levels.

Themes such as construction, ferrous metals and banks witnessed a strong 2007 but underwent steep corrections in the first few months of 2008. The fund nevertheless appeared bullish on these sectors with increase in exposure of 2-6 times their April 2007 levels.

Holdings in consumer non-durables, popularly viewed as a defensive sector, doubled. Weights in individual sectors, however, remained at less than 10 per cent.

Stock moves: The fund saw as many as 37 stocks enter the portfolio and 25 find their way out.

Glenmark Pharma, Welspun Gujarat, Lanco Infratech, Reliance Petroleum, Reliance Capital and Reliance Infrastructure — that gained between 100 and 237 per cent between April 2007 and April 2008, entered afresh.

The fund also bought into United Spirits, Punj Lloyd, Tata Steel, Axis Bank, SBI and Godrej Industries — stocks that gained between 50-98 per cent during the one-year period.

Hindustan Unilever, HCL Technologies and Mahindra & Mahindra were sold. Tech Mahindra, Sun Pharma, India Cements and HT Media also failed to impress the fund and took the exit route.

Reliance Industries, Infosys, Bharti Airtel, L&T, Aban Offshore and ICICI Bank were key stocks held during this period.

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