Kotak Emerging Equity Fund: fund review
The time-tested adage says that long-term investors always gain when they buy into good stocks when markets are falling.
Historically, it has been observed that if long-term investors buy into mid-caps they gain more when compared with large-caps. In the past five years, the BSE Midcap Index has given returns of 58% while the BSE 100 index comprising large companies has given 51% returns. Thus it makes sense to invest in mid-cap schemes with at least a five-year horizon.
Among mid-cap schemes, investors seeking to participate in the rally of quality mid-cap stocks may consider Kotak Emerging Equity Scheme. One of the key features of the scheme is it has beaten its benchmark and peers across all time frames. This consistency is a key attractive proposition for investing in the scheme. The scheme has given 9% and 16 % returns in the past three-year and five-year periods, respectively, while its benchmark index Nifty Midcap 100 TRI has given 7.4 % and 11.6 % in the same periods, respectively.
In the past six months, the scheme’s fund manager Pankaj Tibrewal has constructed a good portfolio of companies which have prominent market share in their respective sectors. A reasonably good market share helps companies tide over slowdown better. Prominent companies which are part of the scheme’s portfolio are V-Guard Industries, Page Industries, Sheela Foam, and Alkem Laboratories.
Portfolio change (past 6 months)
|New Entrants||Complete Exits||Increase in Allocation|
|Alkem Laboratories||D-Link (India)||Sheela Foam|
|Cadila Healthcare||Eveready Industries (India)||V-Guard Industries|
|Max Financial Services||Sundaram Finance Holdings||Torrent Pharma|
Returns (in %)
|Period||CAGR Return||SIP CAGR Return||Equity market cap
Fund Midcap - Avg
Annualised Return (%)
Returns peer comparison (in %)
|Axis Midcap Fund||1.78||11.84||12.77|
|DSP Midcap Fund||-0.98||9.19||14.67|
|HDFC Mid-Cap Opportunities Fund||-6.58||8.81||13.64|
Kaustubh Belapurkar, director-Fund Research, Morningstar India
Pankaj Tibrewal runs the fund with a focus on containing downside risk. The fund’s portfolio has been positioned to leverage growth in the domestic economy with its overweight positions in basic materials and industrial stocks. The fund is an excellent option for investors looking invest in the mid-cap space over a medium- to long-term.