The fund’s equity portfolio has been diversified across market caps during the past three years, with predominant allocation to large-cap stocks
The fund was launched in September 2009 as Kotak Select Focus Fund. Subsequent to the re-categorisation of mutual fund schemes by SEBI, it was renamed Kotak Standard Multicap Fund in May 2018. The fund ranked number two in the multi-cap category in CRISIL Mutual Fund Ranking (CMFR) for the last two quarters ended June 2018. The scheme seeks to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors.
Harsha Upadhyaya has been managing the fund since August 2012. He has nearly two decades of experience in equity research and fund management. During the past three years, the fund’s assets under management (AUM) increased over six times from Rs 3,152 crore in July 2015 to Rs 19,827 crore in June 2018.
Trailing returns
The fund has outperformed the benchmark (Nifty 200 TRI) in the past 2, 3, 5 and 7 year trailing periods and the category (represented by funds ranked in the multi-cap funds category in CRISIL Mutual Fund Rank - June 2018) across all periods under analysis.
An investment of Rs 10,000 in the fund on September 11, 2009 (inception date of the fund) would have grown to Rs 34,145 (14.85% CAGR) on July 24, 2018 vis-à-vis the benchmark’s Rs 26,512 (11.62% CAGR) and the category’s Rs 33,139 (14.46% CAGR).
SIP returns
A monthly investment of Rs 10,000 via a systematic investment plan (SIP) for seven years would have grown to Rs 16.39 lakh (XIRR 18.87%). A similar investment in the benchmark would have grown to Rs 14.29 lakh (XIRR 15%).
Risk-reward matrix
The fund delivered higher average daily returns over the past three years compared with the benchmark and peers, coupled with lower volatility.
Portfolio analysis
The fund’s equity portfolio has been diversified across market caps during the past three years, with predominant allocation to large-cap stocks. The large-cap allocation ranged between 68.85% to 78.44% during this period.
Being true to label, the fund has remained focused on a few selected sectors. The top five sectors - banks, auto, cement, finance and petroleum products - constituted 60.28% of its equity portfolio, on average, during the three years.
HDFC Bank was the highest contributor to the fund’s performance during the period under analysis, followed by Reliance Industries, Bajaj Finance, Maruti Suzuki and IndusInd Bank.
The banking sector (22.54%) was the largest constituent of the fund’s equity portfolio in June 2018, followed by finance (14.68%), auto (8.96%), consumer non-durables (8.06%) and software (7.58%).
During the past three years, the fund invested in 81 stocks, of which 38 were held consistently; 16 of the consistently held stocks outperformed the benchmark during this period. HDFC Bank, Bajaj Finance and Maruti Suzuki have been the highest contributors to the fund’s performance among the consistently held stocks.
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The fund has outperformed the benchmark (Nifty 200 TRI) in the past 2, 3, 5 and 7 year trailing periods and the category (represented by funds ranked in the multi-cap funds category in CRISIL Mutual Fund Rank - June 2018) across all periods under analysis. )
A monthly investment of Rs 10,000 via a systematic investment plan (SIP) for seven years would have grown to Rs 16.39 lakh (XIRR 18.87%). A similar investment in the benchmark would have grown to Rs 14.29 lakh (XIRR 15%).
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