Kotak Small Cap mutual fund may continue to underperform in the near term; what should investors do?

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals of the fund, its portfolio and performance to help you make an informed investment decision.

BASIC FACTS
DATE OF LAUNCH
24 FEBRUARY 2005
CATEGORY

EQUITY
TYPE
SMALL CAP
AUM*
Rs.17,507 crore
BENCHMARK
NIFTY SMALLCAP 250
TOTAL RETURN INDEX

WHAT IT COSTS
NAV**
GROWTH OPTION
Rs.279.43
IDCW
Rs.121.90
MINIMUM INVESTMENT
Rs.100

MINIMUM SIP AMOUNT
Rs.100

EXPENSE RATIO# (%)
1.64
EXIT LOAD
For units in excess of 10% of the investment, 1% will be charged for redemption within 365 days.

*AS ON 31 JUL 2024
**AS ON 3 SEP 2024
#AS ON 31 JUL 2024

FUND MANAGER
HARISH BIHANI
10 MONTHS

Recent portfolio changes
New entrants
ICICI Lombard General Insurance Company (Jun).
Aster DM Healthcare, Bansal Wire Industries, Cello World (Jul).
Complete exits
Suprajit Engineering, VIP Industries (Jun).

Should You Buy
Earlier run as a mid-cap offering, this fund was repositioned as a small-cap fund in 2018. Its long-serving fund manager handed over the reins last year, but the central investing philosophy emphasising quality and downside protection remains. The fund positioning currently favours domestic businesses with focus on leaders in respective sectors. After a strong run from 2019 to 2021, its performance has taken a beating in recent years, led by the market shift towards value stocks. The current fund manager continues to believe in the ability of high quality businesses to outperform over longer periods, and has increased weightage in select names. The fund may continue to underperform in the near term till the market starts rewarding growth businesses again.