In rising markets when certainty of earnings’ growth is a long-term development, it is advisable to be invested with schemes which have high focus on large-sized companies. Given the distinct advantages large-sized companies possess, the possibility of these companies showing better earnings growth than mid-sized companies is quite high. One mutual fund scheme which has high focus on large-sized companies and has climbed up the list of best-performing funds is Kotak Select Focus Fund.
Harsha Upadhyaya, who has been managing the scheme for the past five years, follows top-down approach and selects companies following growth style of investing. A few key parameters he keeps in mind are competitive edge in their respective sectors, scalability and established and proven business model. This strategy has paid off. In the past three-year and five-year periods, the scheme has generated 15.4 per cent and 21.4 per cent returns, while its benchmark index Nifty 200 has given 9 per cent and 14.3 per cent returns in the same period.
At present, over 80 per cent of the scheme’s portfolio is dedicated to large-sized companies and remaining is divided between mid- and small-sized companies. In the past six months, the scheme invested in well-managed and established large-sized companies across themes, which represent the theme of recovery of economic growth. These are State Bank of India, HDFC Bank, Bharat Electronics, ITC, Petronet LNG, and Larsen & Toubro.
