Here’s yet another opportunity fund — India’s 17th and surprisingly, Kotak’s second. Interestingly, Kotak’s existing Opportunities Fund is the asset management company’s (AMC) largest equity fund.
The fund’s Value Research Rating is a high four stars.
According to the AMC, Kotak Select Focus Fund will take opportunistic and focused bets on sectors and companies likely to do well due to factors such as government-induced reforms, global influences, macro economic variables such as interest rates, other company-specific dynamics and valuations.
The portfolio will be managed actively without any restriction on exposure to a single sector or company.
Fund Manager
The fund has three designated fund managers – Krishna Sanghvi and Emmanuel Elango will manage equity investments and Abhishek Bisen to manage fixed income investments.
Krishna holds an MMS in Finance (NMIMS, Mumbai) and is a CFA (ICFAI). He has been with Kotak AMC since February 2006 and manages 8 other equity schemes. Emmanuel’s association with Kotak AMC dates back to July 2008. A PGDM holder from IIM-B, he manages 4 other equity schemes and has earlier worked with JPMorgan AMC and Franklin Templeton AMC. Abhishek is MBA (Finance) and manages all FMPs, an arbitrage fund and other debt schemes of the fund house.
Fund Family
Kotak Mahindra AMC started in June 1998. Today, it is the seventh largest fund house (June 2009), it had over Rs 30,000 crore of assets under management (AUM) of which equity fund assets form about 12 per cent. It has a lineup of 12 equity funds of which 2 are index funds, one tax planning fund, one emerging markets fund and the rest diversified equity funds. Aside from the 4-star rating of Kotak Opportunities Fund, Value Research has bestowed 4 other equity funds a 4-star rating, one each as 2-star and 1-star.
Suitability and Recommendation
Opportunity funds are aggressive bets. Due to their active and concentrated investing style, they are able to deliver good returns during bull runs. But this may also act against them in a falling market. For general investors, such funds are suited for a small portion of their portfolio.
Investors should, however, be wary of investing in this new fund. There are 16 existing opportunities funds, some of which already have a proved track record of good risk adjusted returns, one being Kotak Opportunities Fund itself. Those looking for adding an aggressive fund to their portfolio should be looking to pick one from the existing lineup.
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Basic Details
Type: Open-End Equity Fund
NFO Opens: July 22, 2009
NFO Closes: August 20, 2009
Plan / Options: Growth and Dividend (reinvestment and payout) options.
Minimum Application Amount: Rs. 5,000/-
Minimum Additional Purchase / Redemption: Rs 1,000/-
SIP Facility: Available on monthly / quarterly basis (min. Rs 1,000 x 6 cheques).
Benchmark: S&P CNX Nifty
Load Structure (During NFO):
Entry Load: For investments of less than Rs 5 crore, 2.25 per cent
Exit Load: For investments of less than Rs 5 crore, 1 per cent for redemptions within 1 year.
Annual Recurring Expense (maximum): 2.50 per cent (including Investment Management fee of 1.25 per cent).
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