Kotak Standard Multicap Fund: Fund review

When being well-diversified pays off

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In the past six months, movement of key benchmark indices has been range-bound. This situation is likely to persist for some time. Experts point out that it has become difficult to predict demand across key segments in the present economic situation. Scattered and erratic buying trends imply that consumers have funds but they would spend only if a deal suits their cost arithmetic. Such times merit investments in a basic theme which works in almost all cycles of markets — multi-cap schemes.

The very structure of multi-cap schemes allows investments in companies of all sizes is an attractive proposition in present market conditions. Among multi-cap schemes, Kotak Standard Multicap is a distinguished performer. Three factors work in the scheme’s favour: In comparison with its peers, it has a low expense ratio. Second, it is the scheme’s performance which stands out. In the past five-year and 10-year periods, the scheme has given 12.1% and 13% returns respectively, while the average returns of its peers over the same periods are 9% and 11% respectively.

Third, in terms of composition, the scheme is welldiversified in large and midsized companies. Close to 77% of the scheme’s portfolio is in large-sized companies, which helps mitigate volatility in the scheme’s returns.

Portfolio change (Past 6 months)
New Entrants Complete exits Increase in allocation
IndusInd Bank Bharat Financial Inclusion GAIL
Sun Pharmaceuticals Ultratech Cement
Laurus Labs Cadila Healthcare
Avenue Supermarkets Interglobe Aviation

Returns (in %)
Period CAGR Return SIP CAGR Return Equity Multicap AVG Return (%)
1 Year 12.57 6.90 8.05
3 Year 9.00 6.62 5.87
5 Year 12.16 10.15 8.57

Returns peer comparison (in %)
1-year 3-year 5-year
Kotak Standard Multicap Fund 12.57 9.00 12.16
Axis Focused 25 Fund 15.91 12.68 13.98
Franklin India Focused Equity Fund 10.85 6.47 9.89

Expert Take
Harshvardhan Roongta, CFP, Roongta Securities
This is one of the few schemes which has been a consistent performer across market cycles. The investment style is growth-oriented. Being a multi-cap fund, the fund manager has the liberty to invest in quality companies irrespective of size. A major portion of the portfolio is in largecaps which provides relative stability from volatility. Investors looking for a quality multicap fund can choose this scheme without hesitation.
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