Performance and Strategy: Kotak Contra was launched on the premise of investing in “fundamentally strong companies that are temporarily undervalued”. While the equity shakeout that began last year wiped away a good chunk of the gains the fund had managed in the three years of its existence, it merits attention because, despite this fall, it has fared better in containing losses when compared to that of its category average and benchmark, the CNX 500. On a one-year return basis, the fund has also managed to marginally better the performance of Magnum Contra, while it beat JM Contra and DBS Chola Contra, which are pitched against the same benchmark, hands down. However given the abundance of ‘value’ in the current markets, the fund appears to be slowly shifting focus towards a ‘growth-based’ investment style.

Portfolio: From a value-based approach during the peak of the bull rally, which saw the fund sport a high exposure to banks and consumer non-durables, with little under 7 per cent of its assets parked in debt, the fund’s portfolio has since changed.

The fund’s exposure to debt has now increased to about one-fourth of its total assets. It currently has more than half its portfolio invested in large-capitalisation companies, with the remaining being spread about among mid-caps; small caps sport less than 5 per cent weight in its overall portfolio.

But what’s notable are the fund’s sector and stock choices. Its latest portfolio sports a high concentration of sectors such as energy, banks and telecom.

Save for a handful of stocks such as Jindal Steel and Power, ABG Infralogistics and Coromandel Fertilisers, a good chunk of the top holdings in its latest portfolio belong to the blue-chip category.

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