Kotak Emerging Equity Fund Growth

About the Kotak Emerging Equity Fund – Growth

The Kotak Emerging Equity Fund is designed to invest in stocks of companies that show promising potential for rapid growth in the future. The fund focuses more on smaller and mid-sized companies, which generally have greater growth opportunities but also carry a higher level of risk. These companies operate in various sectors like manufacturing, technology, healthcare, and consumer goods.

For investors seeking to enter the Indian equity market and who are open to taking on higher risks in pursuit of potentially higher returns, the Kotak Emerging Equity Fund presents an attractive investment option.

Key Parameters

Consider the following key parameters while investing in the Kotak Emerging Equity Fund – Growth:

1. As of May 9, 2023, the Kotak Emerging Equity Fund – Direct Plan – Growth has a Net Asset Value (NAV) of ₹87.81.
2. Impressively, the Kotak Emerging Equity Fund – Direct Plan – Growth boasts a substantial ₹24,407 Crore worth of assets under management (AUM) as of March 31, 2023, surpassing the average for its category.
3. The fund operates with an expense ratio of merely 0.45%, ensuring that a minimal portion of investors’ funds is utilised for administrative expenses.

Taxation

Since the Kotak Emerging Equity Fund is classified as a mid-cap mutual fund, the taxation rules applicable are as follows:

1. Short-term capital gains, which are made on investments held for less than a year, are subject to a 15% tax rate.
2. Long-term capital gains arising from investments held for more than one year will be taxed at a 10% rate without the benefit of indexation. However, it’s worth noting that gains up to Rs 1 lakh are exempt from taxation in the case of long-term capital gains.
3. Dividends received from the fund will be taxed based on the applicable income tax slab rate for the investor.

Holdings

The Kotak Emerging Equity Fund – Direct Plan – Growth has strategically allocated its funds across various sectors, including Cash Equivalent, Industrial, Basic Materials, Consumer Cyclical, Financial Services, Health, Technology, Real Estate, Consumer Defensive, Utilities, and Energy. This diversified approach enables the fund to capture potential growth opportunities in different areas of the market.

Among its top holdings, the fund has invested in esteemed companies such as Supreme Industries Ltd, Schaeffler India Ltd, Shs Dematerialised, Cummins India Ltd, Persistent Systems Ltd, and Solar Industries India Ltd. These holdings represent a mix of reliable and promising businesses across different industries.

Returns

The Kotak Emerging Equity Fund – Direct Plan – Growth has delivered an impressive compounded annual growth rate (CAGR) of 19.48% since its inception. Looking at more recent performance, over the past 1 year, 3 years, and 5 years, the fund has provided CAGR returns of 14.6%, 36.69%, and 15.23%, respectively.

These numbers showcase the fund’s ability to generate consistent growth over the years, offering investors the potential to see their investments grow steadily. It reflects the fund’s track record of delivering competitive returns in both short-term and long-term investment horizons.

Investment Objective of Kotak Emerging Equity Fund – Growth

The primary goal of the scheme is to achieve long-term capital appreciation by investing mainly in mid-sized companies’ equity and equity-related securities. Additionally, the scheme has the flexibility to invest in debt and money market instruments based on the asset allocation table.

It’s important to note that while the scheme aims to fulfil its investment objective, there is no guarantee or assurance of its achievement. The performance and outcomes of the scheme may vary depending on market conditions and other factors.

Minimum Investment and Lockin Period

You can start investing in the Kotak Emerging Equity Fund – Direct Plan – Growth with a minimum lump sum payment of INR 100 or through a Systematic Investment Plan (SIP) with a minimum investment of INR 100. The fund does not impose any lock-in period, allowing investors the flexibility to enter or exit their investments as per their preference.

This means you can start investing with a small amount and choose between a lump sum or SIP mode based on your investment goals and preferences.

Kotak Mahindra Mutual Funds

Kotak Mahindra Asset Management Co Ltd (Kotak AMC) is a fully-owned subsidiary of Kotak Mahindra Bank, a renowned private sector bank in India. With a rich history starting from its establishment in 1998, Kotak AMC has flourished to become one of the largest asset management companies in India. As a trusted player in the market, they cater to the diverse investment needs of individuals, institutions, and corporate clients. Kotak AMC offers a wide array of investment options, including mutual funds, pension funds, and exchange-traded funds (ETFs), ensuring a comprehensive range of choices for investors.

Currently, Kotak AMC manages a substantial AUM of ₹2.7 lakh crore, which accounts for 7.3% of the total AUM managed by 41 other AMCs in India. This achievement places them at an impressive AUM rank of 5 out of 40. Their offerings comprise 53 schemes, expertly managed by 14 skilled fund managers. Of these schemes, 22 are focused on equity investments, 22 are debt-oriented, and 7 are hybrid.