Kotak Equity Fund of Funds (FoFs), India's only FoFs that invests in other AMCs' funds, seems to be having a good portfolio to hold on. Since two months of its launch, Kotak Equity FoFs has gained 11.2 per cent. Had you invested in the same AMC's core equity fund - Kotak 30 - your investment would have grown by 8.8 per cent. That's the beauty of FoFs. It not only keep your investments spread across top performing funds but also provide the much-needed diversification and sometimes better returns as well, as is the case now. Thanks to the dual fund management.
Kotak Equity FoFs' investment in Kotak 30 fund is limited to 25 per cent and the rest can be invested in other top performing funds (see table for top-five holdings). The fund has so far been able to abide by its investment objective of maintaining a large-cap tilted portfolio - 60 per cent in to large-caps and the rest into mid-caps. And since its investments are spread over seven equity funds, no single stock accounted for over 3.5 per cent of the fund's overall portfolio. What a diversification!
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