14 Nov 2022
The Kotak Small Cap Fund, one of the offerings from Kotak Mahindra Mutual Fund, invests in small-cap companies. The philosophy is to invest in companies which could be potential large-caps in the future. The fund has managed to clock in more than 17% returns since its inception in 2005**. We bring you insights from the fund manager, Mr Pankaj Tibrewal:
Q. What are the factors that you take into consideration when picking stocks for the Kotak Small Cap Fund?
A. The three primary things that are considered while picking stocks are the quality of the management, the business or businesses that the company is involved in, and the valuations of the shares.
Q. What is the minimum tenure, and what could be the ideal tenure for which investors can remain invested in a small-cap fund?
A. Investors may look at a small-cap fund from a five years and above perspective. The fund aims for long-term capital growth. However, the stocks can be volatile in the short term, so the risk appetite of the investor also needs to be considered here.
Q. What were the themes in focus for the small-cap space?
A. Companies in the domestic manufacturing space, capital goods, chemicals, real estate and companies in the home improvement space, which include tiles, paints, sanitary fittings, cement and the financial space, amongst others. ^
Q. The perception is that small-cap funds are extremely risky. How would you address that?
A. For small-cap companies, it is very essential that one must know what not to do. Stock picking is extremely critical here because there could be a probability that some of these companies may go on to become large-cap companies later. One needs to, via their processes, aim to eliminate companies which seem to be of inferior quality.
** Returns are for Regular plan, Growth option. Data as of 31/10/2022. Scheme inception date: February 24, 2005. Refer below for complete performance details
^Details as on October 31, 2022.
The article may include statements/opinions which contain words or phrases such as "will", "believe", and "expect", and similar expressions or variations of such expressions that are forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties associated with the statements mentioned with respect to but not limited to exposure to market risks, general and exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and/or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc.
Investors are requested to consult their financial advisors to know if the product is suitable for them. They may also consult their tax advisors in case of individual tax instances. This is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. The distribution of it, in certain jurisdictions, may be restricted or totally prohibited and accordingly, persons who come into possession of this material are required to inform themselves about and observe, any such restrictions. The sector(s)/ stock(s) referred if any should not be construed as any kind of recommendation and are for general information only. Past performance may or may not be sustained in future. For a detailed portfolio and related disclosures for the scheme, please refer to our website https://www.kotakmf.com/Information/forms-and-downloads.The portfolio and its composition is subject to change, and the same position may or may not be sustained in future. The fund manager may make the changes, as per different market conditions and in the best interest of the investors. To view the latest complete performance details of the Scheme, kindly refer to the factsheet on our website https://www.kotakmf.com/Information/forms-and-downloads.
Kotak Small Cap Fund is managed by Mr. Pankaj Tibrewal. View the funds managed by him.