Kotak Select Focus hits $500-m mark

Saw consistent growth in 18 months from Rs 300 crore, says CIO

Kotak Select Focus hits $500-m mark
Kotak Mahindra Asset Management Company, which is a wholly owned subsidiary of Kotak Mahindra Bank, on Saturday said that Kotak Select Focus Fund is now a half a billion dollar fund.

Talking to Deccan Herald, Kotak Mahindra Asset Management Company Chief Investment Officer (Equity) Harsha Upadhyaya said that Kotak Select Focus Fund, an open ended equity scheme which was launched on September 11, 2009, has recently touched about Rs 3,200 crore.

Upadhyaya explains, “This is a fund which has grown from about less than 300 crore, may be about 18 months back, to about 3,200 crore now. The fund has delivered consistent performance. Over the last 18 months, the fund has consistently been getting inflows from investors.”

Specific segments

He added, “This is a fund based on a top-down investment approach, by which we mean at every point of economic cycle there are few industry segments which will do better than the rest of the economy. We try to focus on those specific segments and build our investment ideas. For example, if you believe that domestic economy is on the recovery path, then you will start betting on companies in the domestic segment.”

When asked on the sectors Kotak is betting on, he said, “Currently, we are betting on the automobile sector, cement sector, and capital goods. These are the three overweight sectors.”

On AUMs (assets under management), Upadhyaya said, “For the last several months we have been seeing about Rs 5,000 crore – Rs 6,000 crore of net inflows into equity funds. July was slightly subdued, may be at around Rs 3,000 crore – Rs 3,500 crore. The Mutual Fund industry’s aggregate equity AUM has nearly doubled to Rs 1,317,267 crore as of July 2015 over the last two years or so.”

MF industry in good nick

The size of Indian MF (mutual fund) industry is more than Rs 13 lakh crore, Upadhyaya said. “The growth keeps varying, but the last 18-24 months have been very good because, one, there has been some turnaround in the economic activity, plus there is definitely a move away from physical assets such as gold and real estate into financial assets. But of the 13 lakh crore, equity would be about Rs 3,53,000 crore,” he said.

Upadhyaya feels that equities are likely to be moderate in 2015 compared with 2014. “That is because last calendar year if you look at large cap funds they gave anywhere between 40-45 per cent returns, and mid-caps gave 80-100 per cent returns. From that context we were saying that this year is unlikely to be the same as last year.”

“You will still get positive returns but they will be more moderate than what it was in 2014. Our expectation at the beginning of 2015 was this year will see close to low double-digit kind of returns and we continue to hold that view.”

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