Safe And Flexible
Focusing on allocation in the software, petroleum and telecom industries, this fund has played its moves right and is poised for further gain.
Kotak 30 is an equity-diversified large-cap oriented fund wherein t least 80 per cent of the portfolio is invested in large-cap and remaining in mid-caps. The fund has an objective to generate capital appreciation from the portfolio comprising of equity and equity related instruments of around 30 companies which may go up to 39 companies with 65-100 per cent of the portfolio invested in equities and balance in debt securities.
Fund Manager Krishna Sanghavi has been managing this fund since January 2007. And from December 2007, the fund has changed its mandate and increased the maximum number of companies that the fund can invest from 30 to 39. This was mainly done to give the fund manager more flexibility in switching and selecting companies. The fund has also set the limits for being overweight / underweight in sectors vis-à-vis its benchmark which helps the fund manager to adopt suitable investment strategy.
The fund uses a combination of both top-down and bottoms-up approach. Depending on the fund house outlook on the sectors and considering the benchmark weights in these sectors the fund decides on the sectoral allocation. The investment style for the fund is a blend of both growth and value with a major tilt towards growth stocks.
Till July 2008, the top three sectors fbr the fund were petroleum (9.27 per cent), software (9.15 per cent) and telecom (7.85 percent). However, the funds exposure in these sectors was lower than its benchmark exposure in the same period. And as per the fund philosophy, currently the fund is overweight on sectors like financial services as well as capital goods and infrastructure space. The fund has recently reduced its exposure to the realty sector on account of the unfkvourable environment for this sector arising from the liquidity pressure as well as rising interest rates.
As per the fund manager, the main reason behind such performance is the right sectoral as well as stock exposure. Krishna adds that, “We were underweight in the IT and telecom sector and overweight in sectors like banking, infrastructure, capital goods in the last calendar year. This has helped the fund to perform well over the last year.
This fund has managed to beat its category returns as well as its benchmark index Nifty returns on a consistent basis. The fund has managed to give returns of 24.92 per cent and 1.48 per cent in the 3-year and 1-year investment period while the category returns fbr the same period stood at 16.70 per cent and minus 9.65 per cent respectively.
The fund manager also manages funds like Kotak Opportunities, Kotak Lifestyle, Kotak Tax Saver, Kotak MNC, Kotak Mid-Cap, Kotak Balance and Kotak Income Plus with most of the funds having a good track record. With nearly 10 per cent of the asset in cash, the fund seems good for investors with low appetite for risk.
Related posts:
