Fund Review: Kotak Emerging Equity Scheme
Topping the returns chart in the mid cap category, Kotak Emerging Equity Fund is indeed one of the best mid cap funds. Launched on March 30th, 2007, this scheme by Kotak Mutual Fund is a consistent performer which is a result of a robust risk management system that it follows and the stable returns that it has been generating throughout. This top performing mid cap fund has a diversified portfolio consisting of major allocation in mid-caps followed by large-cap and small-cap equities. This investment in small caps helps it in yielding high returns in the bull phase while that in large-caps provide a cushion of stability in the bear phase. Though the fund manager believes in buying and holding stocks, at the same time, they are futuristic in approach. Let's read more about this scheme and know why it should be a part of your investment portfolio.
Table of Content
- Who Should Invest in Kotak Emerging Equity Scheme?
- Facts About Kotak Emerging Equity Scheme - Growth Plan
- Kotak Emerging Equity Fund : Performance
- Risk Analysis of Kotak Emerging Equity Scheme (G)
- Portfolio Allocation of Kotak Emerging Equity Scheme- Growth
- SIP and Lumpsum Investment in Kotak Emerging Equity Scheme
In the present time, when the correction phase is going on, it is observed that large-cap equities are doing much better than the mid-cap and small-cap equities. But, the experts believe that with time the latter two will also yield remarkable returns. Let’s find out what our experts suggest in this context.
Who Should Invest in Kotak Emerging Equity Scheme?
- Investors willing to add an equity scheme to their portfolio may select this scheme as it mainly invests in the developing companies and provides a growth scope.
- Those who are looking for an opportunity to park their money for a long-term may consider investing in this Kotak MF.
- This scheme is for aggressive investors as the risk involved is moderately high on the principal amount invested.
Facts About Kotak Emerging Equity Scheme - Growth Plan
|Benchmark||Nifty Midcap 100 TRI|
|Asset Size||Rs 3,327 crore (As on Jul 31, 2018)|
|Fund Managers||Pankaj Tibrewal|
|Expense Ratio||2.34% (As on Jul 31, 2018)|
|Minimum Lumpsum||Rs 5,000|
|Minimum SIP||Rs 1,000|
|Exit Load||1% for redemption within 365 days|
Kotak Emerging Equity Fund : Performance
|Return Analysis||Trailing Returns||3 - Year Rolling Returns with a gap of 6 months|
|Particulars||Since Launch||Last 5 Years||Last 3 Years||Dec 2013 to Dec 2016||Jun 2014 to Jun 2017||Dec 2014 to Dec 2017||May 2015 to May 2018|
|Benchmark: S&P BSE MidCap||-||27.50%||17.28%||23.36%||-11.12%||21.18%||14.74%|
|Kotak Emerging Equity Scheme||12.92%||32.19%||15.54%||4.40%||25.82%||20.59%||16.08%|
|As on August 27, 2018|
- This scheme has managed to generate 12.92% annual average returns since inception.
- Though the three-year returns of 15.54% yielded by this fund is less than the benchmark returns, however, it has managed to do well with time.
- The five-year return of the scheme is 32.19% and that generated by the benchmark is 27.50%. This clearly shows that it has managed to beat the benchmark in long-run and is performing well.
- For the period of June 2014 to June 2017 and May 2015 to May 2018, this scheme has outperformed its benchmark with good margins.
Risk Analysis of Kotak Emerging Equity Scheme (G)
|Benchmark: S&P BSE MidCap||16.46||-||0.65||-14.55%||100||100|
|Kotak Emerging Equity Scheme||15.69||0.92||0.63||-17.22%||93||92|
|As on July 31, 2018|
- The standard deviation of the scheme is less than both its benchmark and category. Even Beta of the scheme is 0.92% which is less than its category’s Beta by 0.03%. Both these factors prove that the returns yielded by this scheme are less likely to fluctuate, comparatively.
- The Sharpe ratio of this scheme is 0.63% which is again more than its category’s ratio which proves that comparatively it is going to provide better returns with the per unit risk taken.
- The maximum drawdown of the scheme is -17.22% which is although less than its category, still, much more than its benchmark’s drawdown which is -14.55%.
Portfolio Allocation of Kotak Emerging Equity Scheme- Growth
- This scheme as per its category has invested majorly in the mid-cap equities with the percentage of the total assets allocated in it being 68%.
- It has also invested in others such as large-cap, small-cap, giant-cap, and micro-cap. However, the individual investment percentage is not more than 20% of the total assets.
|Basic Material (Agriculture, Chemical, Metal & Mining, Steel, Building Materials)||17.30%|
|Consumer Cyclical (Auto related industries, Travel & Leisure, Marketing Cos, Apparel & Furniture Mfg Cos)||19.19%|
|As on July 31, 2018|
- This scheme has invested more than 60% of the assets in the companies belonging to cyclical sector, around 22% in sensitive sector, and approximately 18% in the defensive sector.
- This scheme has majorly invested in the financial sector with about 23.17% of its assets followed by consumer cyclical. It has not inclined any of its assets towards energy or communication services.
|Stock Name||Weightage (%)||Absolute Returns||Valuation|
|1 Year||5 Year||P/BV||PE|
|Bharat Financial Inclusion Ltd.||4.02||35.95%||967.93%||5.47||26.4|
|RBL Bank Ltd.||3.59||25.23%||-||3.88||39|
|Schaeffler India Ltd.||3.29||27.89%||371.48%||5.03||35.41|
|Ramco Cements Ltd.||3.2||1.75%||393.73%||3.91||31.04|
|Supreme Industries Ltd.||2.91||5.4%||275.85%||7.59||31.39|
|Finolex Cables Ltd.||2.73||7.3%||991.61%||3.8||25.05|
|Solar Industries India Ltd.||2.71||38.3%||-||9.47||46.54|
|Shriram City Union Finance Ltd.||2.6||7.71%||124%||2.3||19.02|
|APL Apollo Tubes Ltd.||2.23||12.21%||1098.55%||4.34||22.84|
|Return: As on July 31st, 2018|
- This fund has invested around 37% of its assets in the top twelve companies which prove that it has chosen to invest in a diversified manner.
- P/E and P/BV ratios appear to be high which states that the stocks of the companies are sold at a price higher than their book values.
- The table shows that mostly all the companies in which the investment has been made have yielded outstanding five-year returns.
SIP and Lumpsum Investment in Kotak Emerging Equity Scheme
|3-Years SIP Returns|
|Cumulative Investment||Growth Value||Absolute Returns||XIRR|
|Kotak Emerging Equity Scheme(G)||36000||46812||30.03%||17.79%|
|3-Years Lumpsum Returns|
|Investment 3-Years ago||Growth Value||Absolute Returns||CAGR|
|Kotak Emerging Equity Scheme(G)||100000||150903||50.90%||14.67%|
|Returns: As on March 31, 2018|
- If an investor makes a SIP investment with a monthly SIP of Rs. 1000 for three years such that the total investment amount is Rs. 36,000, then the maturity amount will be Rs. 46,812.
- In case the investment is made through lumpsum mode with Rs. 1,00,000, then the maturity amount generated will be Rs. 1,50,903 with the return rate being 50.90%.
Investors are suggested to invest in Kotak Emerging Equity Scheme as it is likely to perform well in the coming time now. Those who prefer taking high risk to earn high returns may invest in this scheme by Kotak Mahindra Mutual Fund in the current time. You may invest in it through our platform MySIPonline and may consult the financial experts in case of any confusion.
|Fund||Launch||1-Year Return||3-Year Return||5-Year Return||Expense Ratio (%)||Assets (Cr.)|
|Kotak Emerging Equity Scheme (G)||7-Mar||10.11||15.52||32.17||2.34||3,327|
|ICICI Prudential Mid Cap Fund (G)||4-Oct||8.49||11.91||29.98||2.41||1,535|
|L&T Midcap Fund (G)||4-Aug||8.25||17.81||32||2.39||3,066|
|DSP BlackRock Midcap Fund (G)||6-Nov||10.14||15.46||30.08||2.19||5,676|
|Sundaram Mid Cap Fund (G)||2-Jul||6.56||13.76||29.24||2.12||6,138|
To read about the best mid cap schemes mentioned above, click on this link 5 Best Mid Cap Funds to Invest in 2018
You may also go through the expert reviews on one of the top mid-cap funds, via Fund Review: ICICI Prudential Mid Cap Fund
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