Name: - Kotak 30 -Growth
Type: Open-Ended equity diversified
Fund Manager: Mr. Anand Shah
Inception Date: December 29, 1998
Kotak 30 as the name implies seeks to generate capital appreciation from a portfolio predominantly of equity and equity related securities with investment in, generally, not more than 30 stocks. It is a basically a large cap diversified scheme with some flavour of midcap stocks.
The scheme figures among top performing funds in the diversified equity fund's space, has been a steady performer and boasts of the best five year returns at 38.59%. Its one year and three year returns have been higher than what peers and benchmark indices notched up over the same period. The actively managed portfolio of largecap stocks and select momentum picks appear to explain this performance. Its corpus at Rs 282 crore as on May 2006 has witnessed a growth of 58.4% over last one year and imparts it enough flexibility for management.
The scheme as per stated guidelines could invest 60-100% in equities and 0-40% in Debt and Money market instruments. As on May 2006 it has invested 86.77% of its assets in equities, 5.68% in debt and rest in cash and equivalent. Average equity allocation for the scheme has been at 91.2% past one year and since last two month it has significant allocation to cash in excess of 7%.
Its equity portfolio as on May end is spread across 27 stocks with Infosys Technologies in top spot. The fund has stick to its investment objective and has never invested in more than 30 stocks in last one year and that's why top 10 holdings account for half of equity portfolio. Besides Infosys Technologies other top holdings are M&M, SAIL, PNB and Sterlite industries. This month it added NALCO, HLL and Patel Engineering in its portfolio while exited Bajaj Auto, Reliance Energy and HDFC.
The fund has increased exposure in Computers, Pharma and Diversified sector while substantially reduced in banking sector in last one year. Top 5 sectors account for more than half of equity portfolio and Diversified sector alone accounts for 21% of the portfolio .The fund has cling to some stocks while actively replaced others. The scheme follows a bottom-up approach to stock selection and the investment strategy is to take balanced exposure across sectors while maintaining less than 30% exposure to mid-cap stocks. Not only frontline stocks BHEL, Siemens, L&T but stocks like EID Parry and Deccan Chronicle Holdings has gained substantially in last one year. Its stock calls and rally in large cap stocks has been the driving force behind spectacular performance.
Minimum investment required to enter the scheme is Rs 5000 and offers both dividend and growth options .It charges an entry load of 2.25% for investments less than Rs 5 crore and nil for investments of Rs 5 crore and above. While no exit load is levied. The scheme is benchmarked against BSE Sensex and S&P Nifty. Expense Ratio of the scheme as on April 30, 06 is 2.5% and is higher than the category average of 2.20%.
The fund has a large cap focus and looking at the current state of the market seems an appropriate investment option for conservative investors.
