Many schemes offer the best of the two worlds, equity as well as debt, and such funds are known as hybrid mutual funds. These funds have been classified in sub-categories after SEBI’s re-categorization of conservative, balanced, aggressive, and dynamic asset allocation. A mutual fund house which is offering the best class products in such category is Kotak Mahindra Mutual Fund. Its products suit every investors’ lifestyle and has gained the trust of more than 10 Lakh investors. The fund house has been using various strategies to give the competitive returns to investors. These strategies have been researched by the financial analysts of MySIPonline, whose details have been provided with the respective funds as under:
1. Kotak Equity Arbitrage Fund (G)
Buy low, sell high. This is the philosophy used by the fund managers of Kotak Equity Arbitrage Fund. The fund follows the conservative manner even when it seeks to create long-term wealth for those who wish to minimize equity volatility. Keeping the equity capped with the highest of 40%, the fund trails on the P/E ratio. The fund managers keep the trailing P/E as a primary factor, as it has over time moved in similar high-low ranges across various cycles. This helps them to have no scope of errors in estimation and captures the market expectations of 12 months forward at any point in time.
2. Kotak Equity Hybrid Fund (G)
Investing approximately 75 percent to 80 percent in equity at any time of the market, the Kotak Equity Hybrid Fund does not churn the portfolio excessively. The portfolio turnover ratio of the fund is 39%. The fund managers look out the overall economic scenario in the country before investing in any sector. They invest in the sectors he feels can earn more profits in the coming market cycle. The fund management team of fund looks after the global events that have the power to change the market conditions for the long run. However, the fund managers of Kotak Equity Hybrid Fund (G) also follows the valuations of trailing P/E and P/BV ratios. They use the model keeping the 52 weeks model as a base. As per the financial experts of MySIPonline, a single factor model may also increase allocation, but the extent of increase depends on the magnified use the various factor.
3. Kotak Debt Hybrid Fund (G)
The mandate of this fund is to manage monies in a conservative manner; thus it invests 60-70% of corpus in debt instruments, approximately 30% in equity, equity-linked derivatives, and the rest in money market instruments. The scheme focus on generating regular returns for the investors, whereas an increase in the returns by investing in equity stocks. The core equity is managed from a universe of top 150 stocks during most points of time of the market. However, if there is any significant fall in the yields seen by the fund managers, they flexibly take the duration calls to generate more returns.
Kotak Mutual Fund follows these various strategies for providing high returns to investors who are investing in hybrid funds of the fund house. Investors with moderate risk level may invest in these funds, who wants the capital appreciation in the long run or regular income.
The fund house looks after the business environment of any company before investing in it, the capability of management to scale up the business and discounted cash flows. For more information regarding investment and returns of the funds, you can connect with our experts at MySIPonline.
