The Hindu Business Line : Kotak Midcap: Highly diversified

Kotak Mid-Cap is an open-ended equity growth scheme. The fund defines mid-cap stocks as companies with a market capitalisation of Rs 1,340-8,100 crore. The fund’s mandate allows it to invest up to 65 per cent of its assets in mid-cap stocks.

With markets going through highly volatile phases the fund restricted its mid-cap exposure to 50 per cent of the portfolio. Here is a look at how Kotak Mid-Cap is handling the on-going volatile phase and its portfolio changes over the six-month period ended April.

For a compact asset size of Rs 180 crore, the fund has a highly diversified portfolio of 56 stocks. Over the past six month fund’s assets declined by 25 per cent while NAV corrected by 15 per cent indicating that the fund has witnessed outflows during this time frame. The top ten stocks account for 23 per cent of the portfolio.

The fund added sectors such as auto, consumer non-durables, fertilisers, paper and petroleum. Instead, it pruned exposure to auto ancillaries, banks, capital goods and pharma. The fund renewed interest in the de-rated construction sector and stepped up exposure to finance and retail.

The banking sector continues to retain the top slot. Allahabad Bank, State Bank of India and Yes Bank moved out, while Axis Bank, Bank of India, Centurion Bank of Punjab and Federal Bank were the new faces.

In the construction space, the fund reduced exposure to Gammon India, Hindustan Construction and Patel Engineering. Indiabulls Real Estate, Lanco Infratech, Madhucon Projects, Punj Lloyd and Simplex Infrastructures were the new additions to the portfolio. Jaiprakash Associates was the lone stock to exit.

Kotak Mid Cap also reduced exposure to capital goods ahead of the correction in January but doubled exposure to the sector in the past few months. BHEL and Thermax were the new entrants to the portfolio while holdings in BEML and Crompton Greaves were reduced.

Exposures to ferrous metals were stepped up from 2.4 per cent to 7.7 per cent in the past six months. The fund also added Jindal Steel and Power, JSW Steel, Monnet Ispat and Welspun Gujarat Stahl Rohren to the latest portfolio. Sterlite Industries was the lone stock to represent the non-ferrous segment. The stocks added were Tata Chemicals, Deepak Fertilisers, HDFC, LIC Housing Finance, Mahindra and Mahindra and Sintex Industries.

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