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Kotak Emerging Equity Fund

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Kotak Emerging Equity Fund
Morningstar
Morningstar India - 20 October 2019

Pankaj Tibrewal has had a long association with Kotak and an overall fund management experience of over 12 years. He is a veteran in the industry and is attuned into Kotak’s  investment style.

The portfolio is constructed based on a bottom-up approach and uses the diversified model portfolio created by analysts as an initial reference point. The manager then applies a qualitative overlay to select socks that will form a part of his portfolio. This approach leads to a portfolio of stocks that carries a lower liquidity risk.

The manager invests in growth stocks that have sustainable competitive advantages. He scouts for companies with a strong brand name, business, and market share. The focus is on protecting the downside risk by paying special attention to capital efficiency, corporate governance, and liquidity while constructing the portfolio. Tibrewal typically avoids stocks with corporate governance issues and prefers to invest in businesses that are scalable, with the ability to generate steady cash flow, have good management capabilities, and trade at reasonable valuations.

The fund typically holds around 15 to 20 per cent in large cap names and tends to hold on to mid-cap stocks that grow into large caps, provided that the manager sees an upside in these names. His style of investing leads to a portfolio with a slightly long tail. In terms of the fund’s performance, it has consistently remained in the top two quartiles versus its peers. We think that this fund is a good investment for investors who prefer a consistent  set of returns.

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