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

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

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   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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