Risk-takers can use small bets to ride the biz cycles

Mumbai: Aggressive investors looking to bet on business cycles early on could consider a small allocation to the new fund offer of Kotak Mutual Fund. Distributors are optimistic about the prospects of Kotak Business Cycle Fund given the strong past track record of the fund manager, Pankaj Tibrewal. They, however, advice risk-averse investors to stay away from this product as share valuations are rich across various pockets of the market.

The scheme is currently open for subscription and closes on September 21. The fund will be managed by Pankaj Tibrewal and Abhhishek Bisen.

Tibrewal manages the mid-cap, small-cap and hybrid funds at Kotak Mutual Fund with assets of more than Rs 30,000 crore. All the three funds have outperformed their benchmark indices over the past three- and five-year periods and are ranked in the top quartile.


"The fund management and research team of Kotak is strong and has a demonstrated track record, "says Rupesh Bhansali, head (distribution), GEPL Capital.

In the last five years, Tibrewal has been overweight on speciality chemicals, industrial manufacturing, consumer durables and cement in his midcap and small cap portfolios. This has worked well for these schemes. Financial planners warn against going all out into this product.

In the past it has been seen, many fund managers have gone wrong in predicting cycles which can lead to volatile performance in the near term. "It will be a high risk fund compared to a flexicap fund and hence investors must cap exposure to 5-10% of their portfolio," says Shital Shah, Founder, AG Financial Services, a Ahmedabad based mutual fund distributor.