Mutual Fund Review: Should you invest in Kotak Emerging Equity Fund?
This mid-cap fund returned over 6 per cent, while its benchmark returned about 4 per cent. This makes this fund a good performer in its category. Should you invest in them? Let’s find out.
Kotak Emerging Equity Fund is an offering from Kotak Mahindra Asset Management Company Ltd. (Kotak Mutual Fund) in the Mid-Cap space. In mid-cap space, you have around 31 options, but Kotak Emerging Equity Fund stands out in terms of performance. In this article, we would analyse the performance of Kotak Emerging Equity Fund in detail. So, stay tuned!
Kotak Emerging Equity Fund is an open-ended scheme that invests predominantly in equity and equity-related securities of mid-cap companies to generate long-term capital appreciation. The fund was launched in March 2007 returning around 14 per cent since inception.
Performance
On a trailing basis, this fund has outperformed its category in every period of study.
|
Trailing Returns (%)
|
YTD
|
1-Year
|
3-Year
|
5-Year
|
7-Year
|
10-Year
|
|
Kotak Emerging Equity Fund
|
-0.26
|
4.81
|
25.26
|
13.71
|
17.73
|
19.72
|
|
Benchmark Index
|
-0.31
|
1.90
|
25.02
|
10.89
|
15.67
|
16.89
|
|
Category Average
|
-0.58
|
0.53
|
22.26
|
10.38
|
13.88
|
16.63
|
|
* Data as on January 6, 2023
|
Even in terms of calendar year returns Kotak Emerging Equity Fund has outperformed its category average.
Risk
Risk is something that most investors overlook and invest just based on the returns of the fund. However, while investing in mutual funds, or for that matter any other avenue, it is important to understand the risk undertaken by that investment. Moreover, it is also crucial to gauge whether the fund has returned reasonably for the risk undertaken.
|
Risk Metrics (%)
|
Mean Return
|
Standard Deviation
|
Sharpe
|
Sortino
|
Beta
|
Alpha
|
|
Kotak Emerging Equity Fund
|
25.86
|
24.54
|
0.90
|
0.93
|
0.97
|
0.87
|
|
Benchmark Index
|
25.70
|
25.11
|
0.88
|
0.95
|
--
|
--
|
|
Category Average
|
24.36
|
23.72
|
0.87
|
0.94
|
0.92
|
0.42
|
|
The Risk Measures have been calculated using calendar month returns for the last three years.
Data as on 31-Dec-2022
|
Although it seems that Kotak Emerging Equity Fund is riskier than other funds in the category, the returns generated by this fund justify the risk undertaken as per Sharpe and Sortino metrics.
Final Thoughts
Based on the above analysis, Kotak Emerging Equity Fund seems to be one of the best performers in the category. Now the question is whether or not to invest in them. The answer to this question would differ from one investor to another. This is because investment in mutual funds is wise when you account for your individual risk profile. Having said that, this fund surely seems to be riskier than others, while it does generate good returns over the long run. Moreover, another best part of this fund is that fund manager Pankaj Tibrewal is managing this fund since 2010.