The Hindu Business Line : Kotak 30: Invest through SIP

Besides a long track record of consistently beating its benchmark, the fund has also managed to better its one-year returns over that of other large-cap oriented funds such as Sundaram BNP Paribas Select Focus and Birla Sun Life Top 100.

It’s three and five-year returns also compare favourably vis-À-vis funds such as HSBC Equity and HDFC Top 200. However, the fund has not showcased as much efficiency in manoeuvring through the various corrective phases in the last five years, which may explain the volatility in its returns during shorter intervals.

Keeping this in mind, we suggest that investors consider phasing out their exposure to the fund by way of SIPs.

Performance: The fund, which seeks to hold over 30 stocks (with a maximum limit of 39) in its portfolio, has comfortably bettered benchmark indices such as the Nifty and Sensex, in the three-year and five-year periods as well as in the last one year.

But while it has significantly outpaced the CNX Nifty, its benchmark on the upside, it has not done as well in keeping pace with its benchmark during the corrective phases.

But for the market correction of May 2004, the fund has lagged its benchmark in corrective phases such as the one seen in May 2006 and the protracted equity sell-off of last year (when seen in phases).

What lends comfort is that the margin of its under-performance in these corrective phases has not been as high as that of its out-performance.

That said, the fund may, at best, only qualify as an addition to your core portfolio, given the availability of far better diversified equity funds such as HSBC Equity and strictly large-cap funds such as Sundaram BNP Paribas Select Focus.

Portfolio: Close to three-fourth of its portfolio is invested in companies with market capitalisation of more than Rs 8,000 crore, with the rest being spread out among mid-caps.

While exposure to mid-caps could have otherwise added to the fund’s risk element, that no individual stock in this space enjoys a significant exposure lends comfort.

As a percentage of the fund’s overall portfolio, but for Zee Entertainment Enterprises, in which the fund has little more than two-percentage holding, the rest are less than 1.5 per cent.

Besides that, a high concentration on sectors such as banks, petroleum products and telecom, with a significant exposure to debt (such as bank bonds) and fixed deposits, marks its December 2008 portfolio.

Fund Facts: The NAV per unit is 55.5. Mr Krishna Sanghvi and Mr Emmanuel Elango are the fund managers.

More Stories on : Mutual Funds | Mutual Funds | Recommendation

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

Stories in this Section
Tulip Telecom: Buy

Nestle India: Buy

Kotak 30: Invest through SIP

REC: Buy

The numbers don’t add up

Index Outlook

Make your debut — now