VR Logo

Middle Name: Consistency

Kotak 30 may look risky, but it's large-cap tilt offers safety

The year 2004 was the best in its performance history and the only one when it landed in the top quartile. Its returns of 37 per cent were ahead of the category average of 26.42 per cent. In the subsequent years, it beat the category average by a comfortable margin.

This impressive performance was clearly a result of prudent sector allocations. In 2004, it was overweight on technology, healthcare, basic-engineering and financial services. From 2005 through 2007, it was bullish on the thriving financial services, technology and energy sectors.

In the 2008 market meltdown, the fund consistently managed to curb losses, shedding about 51 per cent as against the category's 56 per cent. It took refuge in the defensive healthcare and FMCG sectors with a high cash and debt allocation.

In the first quarter of 2009 also, it limited its losses to 1.97 per cent as against the category's 3 per cent fall. But in the recent market rally (09/03/2009-30/06/2009), it could not rise as much as its category delivering 55 per cent while the category returned 71 per cent.

While the number of stocks generally fluctuates between 30 and 39, there have been instances where it has fallen to less than 30. A natural outcome of such a tight portfolio is often concentrated stock holdings. But if you are of the opinion that it is too risky, take comfort in the fact that the risk is mitigated by its large-cap tilt.

Not an aggressive churner, stocks like Larsen & Toubro, Reliance Industries Ltd, Infosys Technologies, BHEL, ONGC, ITC and State Bank of India have been in the portfolio for a considerable length of time.

Overall, a stable, large-cap offering that consistently yields decent returns and protects against the downside.