Kotak Focused Equity Fund Direct Growth INF174KA1EN7

Kotak Focused Equity Fund earns an Above Average Process Pillar rating.

The most important driver of the rating is its parent firm's superior long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.5 stars. The parent firm's five-year risk-adjusted success ratio of 63% also supports the rating. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. However, the process is limited by the fund's mediocre long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the process has struggled over that period.

This strategy targets larger plays than its peers’ average in the Focused Fund Morningstar Category. But in terms of style (value/growth) exposure, it is similar. Examining additional factor exposure, this strategy has continually had exposure to high-momentum stocks compared with Morningstar Category peers in the last few years. Momentum is based on the premise that stocks that have recently outperformed will continue to outperform, and those that have underperformed will stay behind. In recent months, the strategy was more exposed to the Momentum factor compared with its Morningstar Category peers as well. This strategy also has had a position favoring high-quality stocks in recent years, which could contribute to higher downside risk protection. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. Such holdings can limit a strategy's downside, but cause it to lag in bull markets. In recent months, the strategy also had less Volatility factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in industrials and technology relative to the category average by 9.1 and 4.1 percentage points, respectively. The sectors with low exposure compared with category peers are financial services and basic materials, underweight the average by 7.0 and 3.3 percentage points of assets, respectively. The portfolio is positioned across 29 holdings and is relatively concentrated. Specifically, 50.4% of the strategy's assets are housed within the top 10 holdings, as opposed to the category’s 33.9% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 29% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.