Kotak Mahindra AMC launches new fund – will invest across economic cycles

• Kotak Mahindra AMC has announced a new fund offer (NFO) Kotak Business Cycle Fund that will follow a business cycles-based investing theme.
• The scheme opens for public subscription on September 7 and closes on September 21 with a minimum subscription amount of ₹5,000.
• Fund manager of the new fund, Pankaj Tibrewal, believes that there are investment opportunities even during economic downturns.
• The fund will track Nifty500 as the benchmark, which has grown 3.65% in the last one year.

Kotak Mahindra Asset Management Company has announced a new fund offer – Kotak Business Cycle Fund, which will invest in sector stocks that can navigate through economic cycles.

The scheme opens for public subscription on September 7 and closes on September 21. The minimum subscription amount is ₹5,000.

Fund manager of the new fund, Pankaj Tibrewal, believes that there are investment opportunities even during economic downturns.

“Even during downturns we have seen that certain industries like cash rich companies in FMCG, pharma do well. So the attempt of the fund will be to navigate those sectors as well,” said Tibrewal in an interaction with Business Insider India.

Sectors expected to perform well in the current economic situation
Commenting on the equity category the fund will be more inclined towards, Tibrewal said that large caps may do well in the current market situation.

“Now, some of the cyclical sectors are well positioned, which means that financials, auto, capital goods, light engineering, precision engineering are looking from a manufacturing renaissance perspective. Some of the dark horses which can do well after 6-8 months in our view could be cements and pharma,” he said

The fund will track Nifty500 as the benchmark, which has grown 3.65% in the last one year.

“Kotak Business Cycle Fund provides a good opportunity for investors to diversify their equity portfolio as there are equity stocks across categories, which tend to do better at various stages of the business cycle. Even during challenging times of economic slowdown, these companies have managed to navigate the challenges and perform well across various economic parameters,” said Nilesh Shah, group president and MD at Kotak Mahindra Asset Management Co.

Bigger picture is positive
Global economic factors like fears of recession, high commodity prices and outflows of funds in the first seven months of the year have impacted markets significantly. The fact that benchmark index Sensex has remained flat and given almost no returns in 2022 so far says it all.

However, Kotak Mahindra MF believes that the broad picture for India still remains strong as inflection points for many sectors have arrived.

“Over a period of time, we believe that the bigger picture playing out in India is quite positive – for example, sectors like manufacturing, financials, auto. We believe there is an inflection point in most of these sectors not only because of what’s happening domestically but also because of what is happening in the external factors in other parts of the geography,” said Tibrewal.

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