In a remarkable feat, the Kotak Smallcap Fund has achieved a compounded annual growth rate (CAGR) of 23.01% since its establishment on February 24, 2005. Illustratively, an investment of ₹10,000 through Systematic Investment Plan (SIP) every month in this fund would have ballooned to approximately ₹5.34 crore by February 27, 2024.
About the Fund: Kotak Smallcap Fund’s investment objective is to generate capital appreciation through a diversified portfolio of equity and equity-related securities. The fund primarily focuses on companies in the small-cap market capitalization segment across various sectors. Managed by Harish Bihani since October 20, 2023, the fund has consistently demonstrated strong performance.
Performance: The fund has delivered impressive rolling returns, averaging 23% in 10 years, 18.53% in five years, 22.55% in three years, and 27.27% in the last one year, according to information provided on the fund’s website. In comparison, the benchmark (Nifty Smallcap 250 – TRI) offered returns of 21.21%, 26.72%, 31.09%, and 69.39%, respectively, during the same periods.
Portfolio (Sectoral Allocation):
- Consumer Durables: 18.17%
- Industrial Products: 12.35%
- Auto Components: 10.58%
- Pharmaceuticals and Biotechnology: 5.95%
- Chemicals and Petrochemicals: 5.63%
- Retailing: 5.41%
- Construction: 5.02%
- IT – Services: 4.11%
- Transport Services: 3.9%
- Agricultural, Commercial, and Construction: 2.64% (Source: Kotak Mutual Fund)
Restrictions on Lumpsum Investments: In response to the recent surge in small-cap stocks, Kotak Mutual Fund has announced restrictions on lumpsum investments in its small-cap funds, effective from March 4, 2024. The cap for fresh lumpsum investments, including additional investments or switch-ins, will be ₹2 lakh per PAN (first holder or guardian) per month. However, Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) registrations will continue with a monthly limit of ₹25,000 per PAN for various frequencies.
Investors are advised to consider these changes in their investment strategies as the fund adapts to market dynamics.
