The Hindu Business Line : Kotak 30: Invest

Investors can consider buying into units of Kotak 30, given its long-term track record in delivering returns better than its benchmark — S&P CNX Nifty; its performance also compares favourably with peers.

Investors may, however, need an above-average risk appetite as Kotak 30 has not been able to contain losses better than its benchmark in the corrective phases of the last five years. In such a scenario, the SIP route may be taken for fresh investments, for averaging costs and participate during a market uptrend.

Kotak-30 is a large-cap (greater than Rs 7,500 crore) focussed fund and invests predominantly in blue-chip companies across sectors. In a volatile market, such a focus makes it better placed to participate in a market upside. The fund can form part of a core long-term portfolio of funds. It may be suitable for investors looking for large-cap focus and looking to ride the rally during market upswings.

Performance and suitability: Kotak 30 has beaten its benchmark consistently over one-, three- and five-year periods quite comfortably. The fund’s performance is better than large-cap oriented funds such as Birla Sunlife Frontline Equity and HDFC Top 200 over a five-year time line. The fund has over a nine-year track record and has delivered returns quite consistently during market rallies and secured a place among the top 10 percentile in the fund ranking chart in all the years.

The fund has, however, not proven its ability to contain downside effectively. Except during the market correction of May 2004, the fund has underperformed in corrective phases such as the one in May 2006 and January-July 2008. But the underperformance itself has not been way behind the Nifty.

Strategy: The fund restricts the number of stocks in its portfolio to less than 35. In the bull-run last year, the fund had taken concentrated exposures in sectors such as capital goods, power and banks. In the corrective phase, it was, therefore, not surprising for the fund to take a hard knock, given the declines witnessed in these sectors.

More Stories on : Mutual Funds | Mutual Funds | Recommendation

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

Stories in this Section
Nu Tek India – IPO: Invest at cut-off

Kotak 30: Invest

Birla Sun Life International Equity: Hold

Oil stocks are still slippery

Dr Reddy’s Laboratories: Hold

Transformers and Rectifiers: Buy

IVRCL Infrastructures: Buy

Life insurers – the road ahead

Index Outlook

Why the Sensex fall is overdone

Trade set-ups: Options for the downturn

Axis Bank: Buy