Kotak Equity Opportunites Fund Review: A Steady performer
Kotak Equity Opportunites Fund is an open-ended large and midcap fund. In this review, we study how consistently the fund has performed when compared with its benchmark and category peers
Kotak Equity Opportunites Fund is an open-ended large and midcap fund. In this review, we study how consistently the fund has performed when compared with its benchmark and category peers. Launched in Sep 2004 as Kotak Opportunites Fund with the freedom to invest across market cap and sectors, it became a large and midcap fund since May 2018.
According to SEBI regulations, the fund shall hold a minimum of 35% largecap and 35% midcap stocks. It can also hold as much as 30% smallcap stocks or up to 30% in bonds. The fund currently has an AUM of Rs. 2,614.21 Crores.
As per the scheme document, The asset allocation and stock sector allocation will depend on macroeconomic trends and the fund managers view of their future potential. Stocks will be selected on a bottom-up basis (fundamentals first, sector second).
Dec 8th Freefincal Bangalore MeetTopics: basics of MF selection, portfolio construction for financial goals & portfolio management. Aimed at both experienced investors & newbies. Registration Link
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Benchmarked against the Nifty 200 TRI (although it can predominantly invest in the top 250 stocks by market cap), the fund has managed to stay in the top 10 when comparing category returns over the last 1,3,5 and 10 years. Hence a closer look is warranted.
Kotak Equity Opportunites Fund has been a fully invested equity fund with an average equity exposure of 94% since Dec 2009. These are the top few sectors.
Kotak Equity Opportunites Fund: Market Cap History
The allocation to large cap, mid cap and small cap stock since July 2017 is shown below. The fund has not been affected much by the change from a diversified equity fund to a large and mid cap fund and holds a large slice of mid caps. This can change with market conditions.
Expense Ratio History
We recently reported wild fluctuations in the direct plan expense ratio of many funds: Why SEBI should stop frequent mutual fund expense ratio changes. Perhaps due to low AUM growth in this fund, the direct plan expense ratio has been reasonably stable.
Performance Analysis
First, we consider how Kotak Equity Opportunites Fund has fared against Nifty 200 Total Returns Index. We shall consider every possible 3,5 and 7-year returns. The number of return data points is mentioned as a number within each plot. For example, over three years, both the index and the fund lines have 2623 data points.
Kotak Equity Opportunites has displayed steady outperformance over seven-year periods. The margin of outperformance has neither been overwhelming or underwhelming. Next, we repeat the same analysis with peers.
Clearly Kotak Equity Opportunites is similar in nature to DSP Equity Opportunites, while Canara Robeco Emerging Equity has significantly outperformed, the returns have been a lot more volatile (see the spread in returns between maximum and minimum). This is also true of Mirae (a much younger fund) over three and five years.
The possible reason for this outperformance can be seen from the historical large, mid and small cap allocation of these funds.
The outperformers – Canara Robeco and Mirae funds were essentially Mid cap and small cap funds in the past. Hence a comparison is not particularly fair.
Kotak Equity Opportunites Fund has had a significant large cap tilt in the past. So going forward, it may be a lot more volatile. The reverse is true for the Mire and Canara Robeco funds.
Can I invest in Kotak Equity Opportunites Fund?
If you prefer a less popular steady performer then this fund would be a good fit. It has increased its mid cap performance so expect it to be a bit more volatile in future. Its long term outperformance is better than short term, so a good amount of patience is necessary to hold this fund.
We also saw that the large and midcap funds from Mirae and Canara may not match their past performance due to a change in market cap allocation.
Dec 8th Freefincal Bangalore MeetTopics: basics of MF selection, portfolio construction for financial goals & portfolio management. Aimed at both experienced investors & newbies. Registration Link
Do share this article with your friends using the buttons below.
Use our Robo-advisory Tool to create a complete financial plan!More than 3,000 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary.
Have a question? Subscribe to our newsletter using the form below.
Hit 'reply' to any email from us! We do not offer personalised investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Our flagship course!Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.Increase your income by getting people to pay for your skills!More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos!Our book for kids: “Chinchu Gets a Superpower!” is now available!Both the boy and girl versions of "Chinchu Gets a Superpower". Most investor problems stem from a lack of informed decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that is key not only to money management and investing but to every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say!Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)
Published by CNBC TV18, this book helps you ask the right questions and find the right answers. It also includes nine online calculators, so you can create custom solutions tailored to your lifestyle. Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is designed to help young earners get the basics right from the start! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.
Your Ultimate Guide to Travel
This is an in-depth exploration of vacation planning, including how to find affordable flights, budget accommodations, and practical travel tips. It also examines the benefits of travelling slowly, both financially and psychologically, with links to relevant web pages and guidance at every step. Get the PDF for Rs 300 (instant download)
Create a complete financial plan with our Robo-advisor!
Trusted by 3500+ investors and advisors! Use code robo25 for a 20% discount!
