How Can Kotak Standard Multicap Fund Save Investors’ from Market Volatility?

Kotak Standard Multicap Fund is one of the best multicap funds in India that can help an investor to ride out market volatility. For this reason, it is compared with the “Wazir” of a chess game. Give a read to the article to know more about the scheme.

Ever played the game of Chess? If yes, then you must be knowing that a queen/wazir is one of the most powerful player which can move any number of square horizontally, vertically, or diagonally in order to save the King. In the same way, Kotak Standard Multicap Fund can also be the Wazir of your portfolio as it can diversify the assets across different caps according to the market conditions, and thus, save the investors from huge loss. The article contains brief analysis of the scheme that will tempt the investors to include this top performing mutual fund of Kotak MF in their portfolio. Stay tuned for a checkmate!

Fund Insight of Kotak Standard Multicap Fund

Kotak Standard Multicap Fund (formerly known as Kotak Select Focus Fund) is a multicap fund of Kotak Mutual Fund which made its inception in the finance market on 11th September, 2009. In such a short interval, the fund has managed to list its name under the best multicap fund having highest AUM and lowest expense ratio. As on 31st May, 2019 the assets under management of the scheme is Rs. 26,010 Crore with an expense ratio of 1.63%. As per the investors’ convenience, the fund allows Lump Sum and SIP mode of investment with the minimum amount required being Rs. 5000 and Rs. 500, respectively.

These were some of the general information that an investor should know before investment. Now, let us see how Kotak Standard Multicap Fund acts as a “Wazir” of your portfolio.

How Can Kotak Standard Multicap Fund Save Investors’ from Market Volatility?

One of the best multicaps of 2019 enjoys the advantage of increasing/decreasing the asset allocation in different market caps namely, large cap, midcap, and small cap stocks. The market sentiments changes the percentage of asset allocation in the following types:

During Market Downtrend: When the market is sluggish, the fund managers of Kotak Standard Multicap Fund diversify more assets in the large cap stocks due to their tendency to recover faster form the market volatility.

During Market Uptrend: The fund manager will shift more capital towards midcap and small cap stocks when the market is witnessing a positive sentiment as the small cap and midcap stocks have high potential of achieving remarkable growth during market uptrend.

In this way, Kotak Standard Multicap Fund takes defensive measures just like a “Wazir” for protecting the investors during market attacks and for surging gains at the same time.

Portfolio of Kotak Standard Multicap Fund

A tight portfolio with relatively low turnover is the key attribute of Kotak Standard Multicap Fund. The multicap fund of Kotak MF has maintained a diversified portfolio, and invest predominantly in the equities. The fund follows “Quality Over Quantity” approach and invests in just 55 stocks.
Moreover, following the growth style of investment, the fund has currently allocated more assets in the large cap stocks (75.89%), and the remaining in the midcap (22.95%) & small cap stocks (1.17%).

Sector Allocation: Kotak Standard Multicap Fund has diversified the assets in the large number of sectors with Financial Sector holding the maximum percentage of asset allocation, i.e., 38.23%. Among other sectors are energy (14.1%), construction (11.5%), technology (7.64%), FMCG (5.4%), automobile (3.96%), services (3.56%), etc.

The portfolio allocation of the multicap fund is quite promising and in-line with the market sentiments. However, a question still comes in the mind of investor that, “Should I invest in Kotak Standard Multicap Fund?” To rest the query of such investors, here is the characteristics that an investor should possess if he wishes to achieve long term capital appreciation.

Who Should Start Investing in Kotak Standard Multicap Fund?

1. Moderate Risk Takers: Kotak Standard Multicap Fund is a good pick for the investors having a moderate risk appetite. As said above, these fund parks the investors’ money across different market caps, therefore they become less risky than the pure equity funds.
2. Long Term Investors: One of the best SIP plan of Kotak Mutual Fund has provided 15% to 16% of the returns in the long run which makes it a suitable choice for the investors having a long term investment perspective.
3. Investors’ in Search of Diversification: Kotak Standard Multicap Fund is one of the top performing mutual funds that can add a flavour of diversification to the portfolio. The scheme can help an investor in capitalizing returns and minimizing market risks.

This brings us to the end of the article. Till now, you must have known that Kotak Standard Multicap Fund has all the characteristics to be a “Wazir” for his King (investor).

Happy Investment!