Skip to main content

Mutual Fund Review: Kotak 30

A pure large-cap fund, Kotak 30 has had a good performance track record. Investors seeking relatively safe portfolio with just about decent returns can consider it

 

GIVEN its name, one can conveniently presume that Kotak 30 is probably an index fund replicating the 30-stocks of the Sensex. The fund, however, is similar to any other diversified equity scheme with an objective to invest in about 30-40 largecap stocks and is benchmarked to the Nifty. Launched in December 1998, the scheme has gained recognition as one of the most popular large-cap schemes of the mutual fund industry.

PERFORMANCE:    

A performer in the category of diversified equity schemes, Kotak 30 has earned better returns than that of its benchmark index — the Nifty, by good margins on most occasions. This includes the meltdown year of 2008 when it lost about 50% of its net asset value (NAV) in the global market crash against nearly 52% decline in the Nifty. However, unlike many other popular schemes of its genre in this category, the scheme failed to make a smart recovery in 2009, fairly disappointing many of its investors. The gain of about 67% made by this scheme last year against 76% gains of the Nifty and about 85% average returns by the category of diversified equity schemes has come as a surprise given its past performance records. This performance has, in fact, neatly pushed down the ratings of this otherwise successful large-cap scheme.


   Since the time of its launch — way back in 1999 — Kotak 30 has handsomely rewarded its investors, especially during the bullish periods of this cycle. After a remarkable performance in the year of its launch, 1999 — when it returned about 152% against the Nifty's 67% gains, Kotak 30 was beaten down during the tech bubble burst in the following couple of years, but was quick to rebound and has been outperforming the broader market indices by extremely good margins since then. Even in 2006 and 2007 — two of the most bullish years of the decade which saw many diversified equity schemes reward its investors by more than 80% gains—Kotak 30's returns of about 44% and 66%, respectively, cannot be undermined given the fact that these come from a pure large cap fund which has bare minimum exposure to the small and mid-cap category of stocks. In the current calendar year too, the fund has put up a fairly decent performance so far, delivering about 6% gains against the Nifty returns of about 4% and the average returns by the category of diversified equity schemes of about 8%.

PORTFOLIO:

Kotak 30 is clearly a scheme for the conservative investor given its exposure to large caps and a relatively low beta. The fund currently commands a beta of 0.89 which implies that for every 1% gain/decline in the market returns, the scheme will gain/lose about 0.89%. This makes it relatively lesser volatile vis-a-vis the market. The fund's low volatility vis-avis its benchmark can be construed to its relatively high exposure in the defensive sectors such as healthcare and FMCG. After a relatively low exposure to the healthcare space in 2009, the fund has been gradually increasing its exposure in this sector, which clearly is one of the top performing sectors of the equity markets today. A low exposure to this space until last year can also be construed as one of the reasons for the fund's relatively disappointing performance last year.


   Of late, the fund has completely moved out of the telecom space. Regulatory interferences and acute competition has made telecom one of the most difficult sectors of the economy today. While some fund managers perceive this as a value sector, given the kind of valuations the sector is currently commanding, for others, this sector has become a failed story all together. In case of Kotak 30, the fund manager is clearly supporting the second cause. As far as the stock selection is concerned, the fund's portfolio comprises of almost all popular large cap counters such as Reliance Industries, Infosys, SBI, TCS, HDFC, PNB, Axis bank, ONGC and others. At the same time, it also has decent exposure in Lupin, Shree Cement and IRB Infrastructure to name a few.

OUR VIEW:

A pure large-cap fund, Kotak 30 has had a good performance track record. However a slowdown in its pace is clearly evident and the fund needs to put in more efforts to match the returns of its other large-cap peers in this category. The fund is recommended for those seeking relatively safe investment portfolio with just about decent returns, which are more or less at par with the market.

 


Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now