A large-cap player with reasonably good returns and average volatility

FUND ANALYSIS: Kotak 30

Don't let the name of the scheme confuse you; it is not an index fund but a diversified equity fund. According to its mandate, the portfolio size will be restricted to 30 stocks and not the 30 BSE Sensex companies.

Over the past three years the fund has been consistent in delivering impressive returns, above the category average. It was in 2004 that the fund first made its mark "" it emerged as the ninth best performer out of 81 funds.

The fund essentially has a growth focus and is a large-cap player. Consequently, it bears a small exposure to mid-caps and a negligible allocation to small cap companies. Nearly 92 per cent of its portfolio at the end of May 2007 was invested in large-cap stocks.

It is the ideal fund for an equity investor who expects above average returns with average volatility. The fund bears a below average risk grade and there is not much churn in the portfolio.

So far, the fund manager has applied the buy-and-hold strategy for select blue chip companies and maintained a significant position in these stocks.

However, the fund is clearly overweight on the technology sector with more than 20 per cent of its funds committed here. So the fund may not be advisable for portfolios which already bear a high exposure to the technology sector.

The rest of the portfolio is evenly diversified across sectors, with relatively high weightage to financial services, diversified, energy and metals sectors.

However, the top five sectors account for nearly three-fourths of its assets. Its top three stocks""Reliance Industries, Bharti Airtel and Larsen & Toubro""account for about 22 per cent of the corpus.

The fund has seen a change in management, with Krishna Sanghvi taking over in January 2007. It remains to be seen if the new fund manager sticks to the old style.

So far the fund is on track with the rest of the category with the year to date return at 7.53 per cent (as on June 20) compared to the category average of 7.36 per cent.