Kotak Emerging Equity Scheme Review: Will this work in a bear market?

Published: April 28, 2019 at 12:04 pm

Last Updated on

This week, let us look at Kotak Emerging Equity Scheme a mid cap scheme launched in March 2007 with a current AUM of about 4000 Crores (7th the mid cap segment). If someone from Kotak AMC is reading this, please recognise that your website is badly broken. I cannot get to this schemes page, cannot download scheme documents and notices. So I had to piece this review with the information I could find here and there.

You can find the full archive of mutual fund reviews, watch the playlist of video reviews. Do you have a mutual fund that you want to be reviewed, then enter your choice here. Also,  found this question on Quora: What is your fav freefincal tool If you have done, do respond!

Kotak Emerging Equity Scheme Review: Will this work in a bear market?

Kotak Emerging Equity Scheme: Investment strategy

The fund was started as a mid cap and small cap fund benchmarked to BSE MidSmallCap Index and due to the SEBI categorization rules had to become a more pre-dominant midcap scheme with NIfty Midcap 100 TRI as the benchmark.

It still takes on significant small cap exposure ( 30% in Aug 2018) and currently 12%. At least at current AUM levels, this would persist for some time but also means higher volatility. It does not have an impressive since inception history with performance picking only in the last 5 years or so.

Kotak emerging Fund since inception performance
Courtesy: Value Research

Five-year rolling returns and risk

The above trend is also seen in the five-year rolling return plot.Kotak Emergingn Equity 5Y Rolling Returns

Risk-wise the fund has been less volatile than its current benchmark.

Kotak Emergingn Equity 5Y Rolling RiskComparison with peers (returns)

We shall now compare Kotak Emerging Equity with its peers in the mid cap space.

Seven years

kotak emergining equity scheme vs peers 7Y returns

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

Five years

kotak emergining equity scheme vs peers 5Y returns

Three years

kotak emergining equity scheme vs peers 3Y returns

You would hopefully agree that there is nothing spectacularly right or wrong about Kotak Emerging Equity.

Comparison with peers (returns)

In term of risk too, the fund has had a reasonable record although Franklin Prima has a better record.

kotak emergining equity scheme vs peers 5Y risk


I did not enjoy writing this as it was hard to get information from the AMC site. Performance-wise Kotak Emerging Equity is “okay”. Like L&T Midcap Fund (read review here) this too has turned around its performance when the market rallied toward the end of 2013.

How can I choose among these funds If I want to? To answer this, I need to insert another graph. The 3Y rolling return comparison with peers and NIfty 100 Midcap.

Selecting a mid cap fundI would avoid Axis Midcap and HDFC Midcap Opp (I am talking like a new investor and not an existing one). I prefer performance when the chips are down. So L &T is the winner (in this window) with Kotak second and Franklin third. If you look above, there is not much difference between Kotak and L &T Funds. So it is essentially a coin toss.

Will this work in a bear market?

Just like L&T Mid Cap, I feel Kotak Emerging Equity Scheme is also untested in a bear market or a sideways market. Here Franklin Prima would score due to its large cap tilt. In any case, if you want to choose the Kotak or L&T funds, be ready for a bumpy ride.

Do share if you found this useful
Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our Publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel


This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)  

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *