Kotak Business Cycle Fund: NFO Review

Kotak Mutual Fund has launched Kotak Business Cycle Fund, an open-ended share program following the investment theme based on business cycles. According to the fund house, the program will invest with a focus on business cycles through dynamic allocation across various sectors and stocks at different stages of the economy’s business cycles.

The New Fund Offering will close for subscription on 21 September.

What is the USP?

According to the fund house, here are some reasons for investors
at choose the scheme. First, the program will use a top-down and bottom-up approach through which it will identify promising sectors and the companies within them.
. The portfolio will focus on a few selected sectors that are likely to perform well in a particular economic cycle. Subsequently, to identify companies within these sectors, portfolio construction will be based on bottom-up stock selection using the Business, Management and Valuation (BMV) model. Two, the system has the flexibility to buy across market caps. It can also invest in all sectors.

The program will invest 80% of the corpus in equity-related securities according to the different economic cycles. The latest recovery cycle from the covid 19 pandemic has seen sectors such as energy, metals and capital goods perform well. Mutual fund Kotak says the fund manager will assess the business environment in which a business operates, management’s ability to execute and grow the business, and valuation of the business based on fundamentals such as discounted cash flows and PE ratios, etc.

Who should invest?

Investors seeking to generate long-term capital appreciation by investing primarily in equity and equity-related securities with an emphasis on economic cycles through dynamic allocation across various sectors and stocks at different stages of the cycles economics of the economy, explains the fund house.

Nilesh Shah, Group Chairman and Managing Director of Kotak Mahindra Asset Management, said, “The Kotak Business Cycle fund offers investors a good opportunity to diversify their stock portfolio, as there are stocks in all categories, which have tend to perform better at different stages of the business cycle. Even during tough times of economic downturn, these companies have managed to weather the challenges and perform well in various economic settings. »

Our point of view

We always tell our readers to avoid NFOs and stick to existing programs with a long-term performance track record. However, experts still say that investors can invest in NFOs if they offer something unique or something that is not available in the market.

Expert’s voice
Puneet Oberoi, Founder and Director of Excellent Investment Advisorz, said: “Some sectors have opened up in the last year and manufacturing is one of them.
led to the launch of thematic funds with good returns . Kotak Business Cycle Fund is also looking for new upcoming opportunities. As we know, India’s growth story over the next 10 years is a game-changer for India. So, if the fund manager manages to choose the right emerging stocks, it should be a performing fund. However, people who have been
invest at least for 5 to 10 years and who have a high risk appetite can invest in this fund.

Funds at a glance
Program Name: Kotak Business Cycle Fund

Benchmark: Nifty 500 Total Return Index

Fund manager: Pankaj Tibrewal and Abhishek Bisen

Opening of the issue: September 7

Closing of the issue: September 21

Input Load: NIL

Exit fee: 1% for reimbursement within 365 days

Minimum investment (NFO): Rs 5,000 and in multiples of Re 1 for purchases


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