Last Updated on January 11, 2022 at 9:32 am
This is a performance review of
The SEBI re-categorization did not affect the fund too much, and it still operates on paper as a fund that can invest across market cap and across sectors with a blend of growth and value styles. It has diluted its mandate of focussing on specific sectors after the SEBI regulations and also perhaps due to its increasing AUM.
Consider this:
- As on Jan 31st 2016: AUM 3,841.35 Crores
- As on Jan 31st 2017: AUM 7,850.84 Crores
- As on Jan 31st 2018: AUM 17842.85 Crores
- As on Nov. 30th 2018: AUM 21,469.29 Crores
So essentially a doubling in less than a year bet 2016 and 2018 (a 6X increase in this period!)
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
Kotak Standard Multicap Fund vs Nifty LargeMicap 250 (screener results)
For Dec 2018, I used the Nifty LargeMidcap 250 index to screen multicap funds. Nifty LargeMidcap 250 index is 50% of NIfty 100 and 50% of Nifty 150 Midcap. Here are the results for download the Dec 2108 freefincal fund screener to come up with such results.
- One year: Beat index 881 out of 1216 times (72%) with 77% downside protection consistently (meaning fund will fall less than the index)
- Two years: Beat index 747 out of 967 times (77%) with 96% downside protection consistency
- Three years: Beat index 639 out of 722 times (89%) with 100% downside protection consistency
- Four years: Beat index 476out of 476 times (100%) with 100% downside protection consistency
- Five years: Beat index 234 out of |234 times (100%) with 100% downside protection consistency
The last couple of years’ performance is still impressive and 100% outperformance over 4 and 5 years is more because of less no of data points.
Risk and return performance: one year
We shall now look at 1,2,3 and 4 year rolling risk and return performance. While the above data gives you a measure of overall consistency, it does not tell you when the outpeformance or underperformance occurred.
The fund uses Nifty 200 as a benchmark. In addition, I have considered, Nifty 100, Nifty next 50, Nifty largemidcap 250 as additional benchmarks.
Each coloured line above has 1238 (see picture) one year return data points.
Each of the 1238 data point above represents the standard deviation of standard deviation of daily returns over a one-year period. Lower the curve falls, lower the risk. Now observe similar data over 2,3 and 4 years
Risk and return performance: two years
Risk and return performance: three years
Risk and return performance: four years
Observations
If we consider the 2,3 and 4 year data, notice that the outperformance margin has noticeably dipped in the last few months. Is this a too much, too soon, AUM effect? My guess would be yes although it is impossible to say for sure.
One way to check is compare performance with
Volatility-wise Kotak Multicap is better than Mirae India Equity. Regarding returns, the pink line (Kotak Multi-cap) has dipped just below the white line (Mirae India Equity) in the last few months. Again not conclusive, but it is fair to suspect “the too much, too soon” effect playing a role here.
I have pointed out earlier that large AUM is not a problem but a large increase in AUM in a short time is a problem – for the fund manager in find opportunities. It is possible that the pressure has showed over the last year or more. This is the reason I keep saying prefer low AUM consistent performers and avoid herding.
I am an investor, what should I do?
The fund management has just about held its head above water. Perhaps one reason is because it always had a well-diversified portfolio. So stay invested, but keep an eye on performance, give Kotak Standard Multicap Fund 3 years to perform from when you invested (more on this next week) and if not satisfactory, exit and move on.
I do not have this fund in my portfolio. Is it worth considering?
The first question you should ask is, do I need this kind of fund in my portfolio. IF yes, then avoid Kotak Standard Multicap Fund, and look for an alternative in this category from the Dec 2108 freefincal fund screener.
Have you subscribed to the freefincal YouTube channel?
Here are the latest videos:
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 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 condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 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 who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
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.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization 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: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! 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 dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)