What is the Investment Strategy of the Kotak Small Cap Fund?

Introduction

Are you looking for a small-cap fund with high growth potential? If so, you should invest in the Kotak Small Cap Fund, as this is designed for those who want to invest in emerging small cap companies that have the potential to grow more in the future. This small cap fund is managed by Kotak Mahindra Asset Management Company (Kotak AMC). Since its launch, this fund has gained attention among investors for its high returns, trust and experienced fund management.

In today’s article, you will get to know about kotak small cap regular growth and its benefits, key features and many more.

What is Kotak Small Cap Fund?

This mutual funds was launched on January 1, 2013 and primarily invests in small cap companies for the long term that have the potential to be large cap in the future. It is like investing in a seed and waiting until it grows and then enjoying its fruit. This fund is managed by Kotak Mahindra AMC, which is known for its trust and reliability to its investors. You can start your SIP from Rs.500 in this fund. This helps investors make a regular investment. Kotak small cap fund growth has been outstanding for the past few years and outperforming its benchmark NIFTY smallcap 250TRI.

The Current value of Kotak small cap fund regular growth NAV (net asset value) is Rs.222.47.

Now, after understanding this small cap fund, let’s move further to its investment philosophy.

 

What is the Investment Strategy of the Kotak Small Cap Fund?

Kotak Small Cap Fund adopts a bottom up approach where a potential fund selection is decided based on the companies growth rather than macro trends. The fund’s investment strategy consists of:

Thorough Research and Analysis

Analysts use multiple metrics to identify small cap companies that have strong financial health, experienced management and exhibit an upward trajectory of growth. The best opportunities are selected based on the analysis of historical performance, future scalability and market positioning.

 Value Investing

This mutual funds recognizes the existence of stocks that are cheap due to strong underlying fundamentals but are trading at very low prices and then it invests which helps in long term investment.

 Focus on Long Term Growth

Investment in the fund is targeted at companies that have a strong competitive edge and are already earning high growth returns to those that are in the early stages but have the potential to grow in terms of market share and expand over time.

 Risk Management

A comprehensive analysis of the portfolio is conducted regularly which helps in rebalancing the assets to align with the objectives of the fund. This approach reduces risks and helps to maximize the investment returns.

 What are the Key features of Kotak small cap fund?

The key features of Kotak Small Cap Fund regular growth are:

Growth Potential of Small Cap Companies

Small cap companies are considered riskier than large cap companies, but they still present an opportunity for higher returns over the long run. Such companies have a lot of room for growth and success, which further makes them more attractive for an investor to pour their money into.

 Diversified Stocks and Bonds

Instead of going through the trouble of mixing and matching this small cap company on one’s own, the fund does it for the investor and provides them access to a diversified group of small cap companies. This mitigates the risk associated with putting money in a single small cap company and enables the investor to put their money with a great deal for profit.

 Consistency

Year after year, this small cap fund has outperformed the benchmark with outstanding margins. It is evident from the track record available that the company knows how to manage and overcome market volatility while ensuring the best returns in the long run.

 Ease of Access

Small time investors and beginners can also benefit from this wonderful opportunity as the fund can be accessed with a low SIP of Rs.500. This makes it easy for investors who do not want to make any huge upfront payments.

 After knowing about its key features lets talk about the mastermind behind this amazing fund.

Who is the fund manager of Kotak Mutual Fund?

The mastermind behind the kotak small cap fund growth is Mr. Pankaj Tiberwal. He manages 3 funds of Kotak mutual fund. He graduated from St. Xaviers College Kolkata and did his master’s in Finance from Manchester University. He joined this organization in 2010. Before that, he worked at Principal Mutual Fund. At Kotak, he manages four funds with AUM totaling around Rs.56000 Cr.

Who Should Invest in Kotak Small Cap Fund?

Kotak small cap fund is a high risk market for investment. So it is generally suitable for:

Long term investors

Investors with a long term horizon spanning 5 to 10 years or more are generally better positioned to ride out market downturns. Long term investment makes the funds growth more sustainable.

Risk Appetite

For those comfortable with higher risk the potential rewards of this small cap fund can be appealing, despite the possibility of short term losses.

 Fund Manager Expertise

Additionally, investors aiming to diversify their equity portfolios beyond large and mid cap stocks might find value in allocating a portion to small cap funds.

 Why Should You Invest in Kotak Small Cap Fund?

Individuals seeking to build their wealth gradually will find the Kotak Small Cap Fund to be one of the best small cap mutual funds. Here is the reasoning:

 Investment Opportunities that Develop Over Time

When this small cap company is expanding its business and investing into new markets, the company has expansion growth possibilities with high returns for investors through significant long term investments. This company expansion comes in the early stages of their business and can provide them with substantial gains.

 Engagement at All Levels

The active management of small cap investments tends to be very tricky and focused. Small cap fund manager Mr. Pankaj Tibrewal managed a niche market and he is a small cap professional, so he happens to be a prolific investor and hence has effective management of the fund.

 Balanced Asset Allocation

To achieve superior growth, the fund is not limited to certain sectors, which allows for better overall long term growth. Even if one sector of the industry performs poorly, other sectors will most likely be performing well, therefore balancing the fund’s overall returns.

After learning and understanding about this fund and its features, lets move towards the last segment of our article.

 Conclusion

In short, this small cap fund is the best choice for investors who are looking to invest their money in companies that are going to be large cap in the future. This fund has delivered impressive returns since its launch, making a difference from its market competitors. You can also start SIP in this fund so that you do not have to need a large capital to invest and this will reduce the risk also. Hence, this is the best emerging fund for your portfolio.