Skip to main content

Mutual Fund Review: Kotak Opportunity Fund

Given Kotak Opportunity's growth-oriented strategy, the fund seems to be good for the long term

 

LAUNCHED in April 2004, Kotak Opportunity was one of the early entrants in the category of opportunity theme based fund that sought to cash in on the future opportunities in the market. The response to the fund was lukewarm initially and so the scheme could only manage 250 crore of asset under management (AUM). However, over the years, its impressive performance has earned it more than 1,130 crore of AUM in the kitty.

PERFORMANCE:

Kotak Opportunity has consistently outperformed the major market indices, the Sensex and the Nifty, and its benchmark S&P CNX 500 by reasonable margins. The exception was in 2008, when it failed to cushion the returns and fell more than the market indices as well as its benchmark.


   Also, during the three years ended 2008, its performance was rather erratic. For instance, in 2006, when due to euphoria markets were on a bull run, the fund returned just about 39% against 36% by the benchmark. The Sensex and the Nifty had returned about 46% and 39%, respectively then. In 2007, the fund came into the limelight by generating as much as 91% return, which was double the returns generated by the Sensex. The benchmark S&P CNX 500 had also returned just about 62% then. However, the fund lost its sheen the very next year with the market crash as the fund failed to cushion its fall.


   In 2009, the fund moved more or less in tandem with major market indices, shuffling among the various market capitalisations with an aim to improve its returns. However, this strategy has paid off in the current financial year.

PORTFOLIO:

Kotak Opportunity Fund's portfolio is far away from being called an opportunities fund. This is due to the mandate of 40% ceiling on mid and small-cap stock exposure that the fund follows. On an average, the fund's portfolio comprises minimum 60% large-cap stock that in most occasions rise to 80%.

   The portfolio is well diversified with more than 60 stock holdings and exposure to a single stock is restricted to about 5%, barring a few large-caps stocks including Reliance Industries, Bharti Airtel and so on.


   As far as sectoral composition is concerned, the fund has a high exposure in financial, and oil & gas in the past one year. However, there has been a shift to low beta sectors like healthcare and IT. This has reduced the risk appetite of this multi cap fund and it now commands a beta of 1.03 times, implying that the fund's performance is aligned with that of the market.


   Apart from this, the fund manager affirms to be bullish on cement, capital goods and FMCG sectors. This is quite evident in the fund's portfolio, with the cement sector gaining its place back in the portfolio after a break of six months and growing exposure of the FMCG sector. Currently the fund's portfolio turnover ratio is 2.5 times, which implies an average holding period being not more than 3-4 months. Only a handful of stocks, including L&T, Reliance Industries and ONGC, have been in the portfolio for more than two years now. However, according the fund manager, the heavy churning has been in practice from the past eight months only and is limited to high volatile sectors like metal and capital goods.

OUR VIEW:

Opportunity funds are a good option, especially in the current market scenario, as they seek to benefit from the next possible trigger at the market place. However, the fund has positioned itself in the category of the large-cap funds and so not been able to leverage on mid-cap stock bull run. However, despite this, there is no denying that the fund has been an outperformer for a while. Given its growth-oriented strategy, the fund might be a good bet in the long term.

 

Popular posts from this blog

Mutual Fund Exit Load Changes

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 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

Atal Pension Yojana contribution Tax Benefit for spouse

Contributions to Atal Pension Yojana (APY) are eligible for the same tax benefits as the NPS. This means that the contributions can be claimed under Section 80CCD (1B). The current limit for Section 80CCD (1B) is   Rs   50,000, over and above the   Rs   1.5 lakh limit under Section 80C. Section 80 CCD (1) is a different one, meant to cover employers' contribution towards NPS . You cannot get tax benefit by investing in the name of your spouse under Section 80 CCD . ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in India for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Religare Tax Plan 4. DSP BlackRock Tax Saver Fund 5. Franklin India TaxShield 6. ICICI Prudential Long Term Equity Fund 7. IDFC Tax Advantage (ELSS) Fund 8. Birla Sun Life Tax Relief 96 9. ...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...

L&T Income Opportunities Fund dividend

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 L&T Income Opportunities Fund declares L&T Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( R /unit) L&T Gilt Investment-DQ 0.3 L&T Gilt Investment Direct-DQ 0.3 L&T Income Opportunities Ret-DQ 0.31 L&T MIP-Wealth Builder-DQ 0.3 L&T MIP-Wealth Builder Direct-DQ 0.3 L&T MIP-DQ 0.3 L&T MIP Direct-DQ 0.3 L&T Short Term Opp-DQ 0.26 L&T Short Term Opp Di...
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