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

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- 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. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...

NPS Investment Choice for Safe Investors

Invest NPS Online       Whether they invested through SIPs or put in a lump sum amount, risk-averse individ uals have earned the highest returns. These are investors who stayed away from stocks and divided their NPS corpus between G class gilt funds and C class corporate debt funds. On average, gilt funds have given 9.75% annualised returns while corporate debt funds have churned out more than 11% in the past five years. As a result, the average return for ultra-safe investors in the past five years is in double digits. Even in the short term, ultrasafe investors have been the biggest gainers among NPS investors. Will the good times continue? The gilt funds of NPS are holding long-term bonds with an average maturity of over 19 years and a modified duration of about 9 years.These funds have done well because interest rate cuts have pushed down bond yields. But experts say this trend will not stay forever. NPS is a long-term investment and the bonds are predominantly held to matu...

Buy Health Insurance Plan even if you are covered with my Employer

Buy Health Insurance Plan Online Yes, getting a private insurance cover now, which extends beyond your retirement age, is recommended There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer's insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won't have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases.   Lastly, health insurance policy you get from your employer may or may not cover your dependants. ------------------------------ ----------------- 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 M...

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
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