Equity mutual funds are among the best mediums for building a sound fortune. Of all these equity mutual funds that exists, Kotak Emerging Equity should be the perfect pick for any investor who wants to partake on the development of India’s economy. Five advantages of investing into kotak emerging equity fund as highlighted in this article.
1. Exposure to Emerging Businesses
Kotak Emerging Equity Fund mainly invests in the growing companies at their growing age of existence. Some of these firms are small to medium sized enterprises that span different industries – such as manufacturing, retail, health care, and so on. This way, investors can share in these fledgling corporate entities’ rise to the top. In the long term, as these companies enlarge and increase their activities, the Fund’s NAV and investors earnings are expected to highly rise.
2. Experienced Fund Management
Mr. Harsha Upadhyaya, with his more than seventeen years’ experience in the Indian equity markets and over seven years’ experience at CRISIL Credit Management, manages the Fund. It is known that he can pick future champions as he had the ability to spot business entities with a sustainable lead, but not only. Consistency of the fund is evidence that the fund manager has been able to select quality stocks with knowledge on how to manage portfolio risks. This experience and knowledge will translate into valuable benefits to investors who make investments on the fund.
3. Diversification Benefits
It is an open-end fund that exposes one to more than 50-60 stocks from almost every sector of the economy. These diversification efforts help minimize stock and sector risks. The investments fund in other sectors are able to cushion losses if a particular sector is not doing well. This ensures that portfolio performance is independent of a specific stock or industry luck.
4. Attractive Returns Potential
Over the last five years the fund managed to produce a return over 20% per year being above its benchmarks’ level as well as a category average. This strategy of investing in emerging companies which have a high potential for growth and ultimately deliver better returns for the investors. Going forward,. It has contributed a lot for its investors through delivering better returns because of its concentration towards small but growing enterprises in developing countries. Moving forward, the fund is very capable to sustain positive long term returns.
5. Low Cost Investment
The expense ratio that reflects mutual funds’ management of the portfolio on an annual basis. The fund deducts this fee from its total return. The expense ratio for Kotak Emerging Equity Fund is only 0.38% annually. Such percentage is much lower compared to other mutual funds targeting emerging business. It is important particularly because at times the cost of investing can turn minimal hence more of the investors’ capital is put into stocks making the annual deductions less. The cumulative effects of a low cost structure enhance the fund’s ability to generate increased yields in 10-15 year periods.
If one want to participate in the Indian growth story, then kotak small cap fund can certainly be an ideal investment for 5paisa investors. One of the best equity mutual funds suitable for long term investment is growth-oriented.