In the last couple of months, the movements of the major benchmark indices have been noted as range-bound, and going by the current situation, this scenario is going to be like this for a while now. The experts have pointed out that predicting demand across important segments has become difficult under the current economic conditions. Erratic and scattered purchasing trends are a clear indication that customers have necessary funds, but they are willing to spend only when the deals suit their cost criteria. Times like these mean the investments are going to go by a basic theme that works in all market cycles: the multi-cap schemes.
And, it seems that Kotak has the ideal plan to fare well in this market in the form of Kotak standard Multicap fund. So, of course you can invest in this fund, but whether or not you should is what you will be able to decide as you read further details about the fund.
Key details of the fund
It is the basic structure of the Multicap schemes to let the investors invest in companies of different sizes, and that is what makes these schemes such a good idea in the current market situation. When discussing Multicap schemes, the name of Kotak standard Multicap fund has to come up as it has been an illustrious performer for the past few years.
The scheme has an asset size of ₹28,348.01 Cr, as of November 2019. Since inception, it has a CAGR of 13.71%. The expense ratio is 0.87% and the cash holding is around 6.5%. The Kotak standard Multicap fund nav is ₹37.126. Mr. Harsha Upadhyaya has been the fund manager for this one since 2012. When it comes to the sectors that this scheme invests in, more than 35% of it is in the financial sector and 15% lies in the energy sector.
The features of the Fund
When it comes to this Kotak Mutual Fund, there are four features that deserve a mention, and they are:
- Long-term capital appreciation: The object for investment in this fund is to get capital appreciation for a long term from a portfolio of equity-related securities and equities, which is usually focused on a certain specific sector.
- Identifying the right sectors: The aim of the scheme is to identify the sectors that are the most likely to work well in the medium term, and focus exposures are also concentrated on the same.
- Diversification at stock levels: No restrictions are levied on the kind of sectors that the scheme focuses exposure to. The portfolio is usually diversified right at stock levels in case of market capitalization.
- Capturing the right themes: This scheme has the ability of capturing different themes which are in favor in a completely focused manner, which is evident in the performance of Kotak standard Multicap fund.
Factors that work for this scheme
There are three major factors behind the success of this scheme, and they are:
- It comes with a pretty low expense ratio when compared to its peers
- The performance of the scheme clearly stands out. In the last ten year and five year periods, the scheme has offered thirteen percent and twelve percent returns, respectively. The average returns of the major competitors of the fund are eleven percent and nine percent, respectively.
- Finally, when it comes to composition, this fund is diversified well enough in medium and large companies. In fact, nearly seventy-seven percent of Kotak standard Multicap fund portfolio is in the large companies. This helps in mitigating the volatility in the returns of the scheme.
Is this mutual fund suited to your needs?
If you are an investor who wants to balance out volatility and risk in one portfolio, then you should go for this multi-cap fund or HDFC Mutual Fund. These funds work well for the investors who come with a moderate risk tolerance for the equities.
Investors who do not want to go for the hassles of picking up individual stocks or considering the market capitalizations that would benefit them might go for this fund to begin with. Once they are sure of the category, they have the option to move over to those funds. The experts believe that the funds of this category are perfect for wealth creation as opposed to the standard large cap funds.
Because the scheme comes with a vibrant investment strategy, the funds get to gather high corpus for reaching long term goals like higher education or retirement. Investors who want to improve the investments using SIP (Systematic Investment Plans) should also consider this particular section of funds.
This scheme has consistently performed across the market cycles, and the style of investment is growth oriented. Being a Multicap fund gives the manager the liberty of investing in top companies. A majority of the portfolio being in the large caps keeps the Kotak standard Multicap fund growth consistent. If you are looking for a good mutual fund, then this one is certainly something for you to consider.