Kotak Bluechip Fund

Kotak Bluechip fund is an equity fund that invests a significant portion of its capital in large-cap companies. The investor must understand that bluechip is a term coined to describe big businesses with a significant market share. The Kotak Bluechip Fund invests predominantly in capital markets with almost no exposure to debt instruments. The fund is best suited for aggressive investors who desire capital appreciation and wealth creation.

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The fund has its stake in various sectors such as refineries, software services, manufacturing, engineering, banking, etc. The fund has rewarded its unit holders enormously with double-digit annualized returns. The fund comes in three variants, as given below.

  • Kotak Bluechip Fund-Direct Growth
  • Kotak Bluechip Fund-Regular Growth
  • Kotak Bluechip Fund-IDCW Direct and Regular

The direct and regular variants do not offer dividends to its unit holders, whereas the income distribution cum withdrawal option provides dividend pay-outs at regular intervals. The Kotak Bluechip Mutual Fund delivers its products through intermediaries and third parties such as banks and other financial service partners. Kotak Bluechip Regular Growth Fund can be purchased but with slightly higher fees compared to Kotak Bluechip fund growth Direct which can be purchased only from the fund house. 

Table: Investment Facts

Parameter

Details

Fund Name

Kotak Mahindra Mutual Fund

Fund House

Kotak Mahindra Asset Management Company Ltd

Launch Date

Jan 01, 2013

Benchmark

NIFTY 50 TRI

Type

Open-ended

Minimum Investment

Rs.1000

Lock-in Period

No

Entry Load

No

Exit Load

1.0%

Return Performance

Above average

Fund Consistency

Above average

Risk Level

High

Investment Objective:

Kotak Mutual Fund’s primary objective is to create wealth for its unit holders. The fund house and their expert stock pickers ensure that the right mix of equities is added to the fund. The Company also utilizes the services of its in-house researchers, who identify the potential winners and multi-baggers in the stock market. Kotak AMC's team of professionals ensures they achieve the main objective of capital appreciation of its investors. The investment checklist followed by the Kotak AMC team is as follows.

  • The fund house first ensures that the Company picked by them has a strong balance sheet and financial prowess such as a good earnings report, cash flow, increasing profits, etc.
  • The fund manager and his team of researchers emphasize the need for excellent management. This includes abilities such as good leadership, his track record, and his reputation in the industry.
  • The researchers then analyse the business model followed by the Company, its competitiveness in the market, and the strategy used to win customers and sustain the business in the long run.
  • Most importantly, the companies must be less affected during periods of economic downturns and recession.
  • Another important factor in the checklist is the Company's liquidity in the market and its value.

Those mentioned above are the essential checklist followed by the fund house in picking the stocks and have proven to identify winners and multi-baggers in the equity markets effectively.

Fund Summary:

  1. Kotak Bluechip Fund -Direct-Growth

    • Risk-level-High
    • NAV-Rs.371.45 as of June 21, 2021
    • Expense Ratio-1.0%
    • Fund Started- Jan 01, 2013
  2. Kotak Bluechip Fund -Regular Growth

    • Risk-level- High
    • NAV-Rs.339.27 as of June 21, 2021
    • Expense Ratio-2.11%
    • Fund Started-Feb 06,2003
  3. Kotak Bluechip Fund -IDCW Direct and Regular

    • Risk-level- High
    • NAV-49.13 as of June 21, 2021
    • Expense Ratio-0.92%
    • Fund Started- Jan 01, 2013

Fund Returns Summary:

  1. Kotak Bluechip Fund -Direct Growth-Returns Summary

    Time Period

    Annualized returns per year

    6 months

    21.84%

    1 year

    58.56%

    3 years

    16.46%

    5 years

    15.37%

    10 years

    15.24%

  2. Kotak Bluechip Fund - Regular Plan Growth-Returns Summary

    Time Period

    Annualized returns per year

    6 months

    21.11%

    1 year

    56.71%

    3 years

    15.17%

    5 years

    14.00%

    10 years

    18.54%

  3. Kotak Bluechip Fund - IDCW Direct and regular-Returns Summary

    Time Period

    Annualized returns per year

    6 months

    21.84%

    1 year

    58.56%

    3 years

    16.46%

    5 years

    15.37%

    10 years

    15.24%

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Pros and Cons

Pros

Cons

 Expense ratio is 0.92, one of the lowest in the industry.

 The fund is highly volatile.

 It generates higher 1-year returns. 

 Bluechip funds come under the very high-risk category.

 Returns for 3 years are above average in comparison to the peers.

 The possibility of capital loss is high during a market crash.

 Performance of the fund over 5 years is one of the best in the bluechip category.

 Not suitable for short-term investors.

The fund has been in existence for more than 7 seven years.

The asset under management is enormous, which can diminish the returns in the long run.

Benefits of Kotak Bluechip Fund

  1. Strong Performance

    The unit holders can bank on the fund's stellar performance for more than five years since its inception and have provided an annualized return of over 15% to its existing investors. Kotak Bluechip Fund has outperformed the benchmark indices such as NIFTY 50 TRI and Sensex by more than three basis points annually, proving the team's efficiency that manages the fund.

  2. Investment Choices across Various Sectors

     The fund managers have effectively diversified the portfolio of stocks across various sectors such as pharma, construction, specialty chemicals, banking, etc., to balance risk and ensure consistent capital appreciation. The fund house invests over 96% of its capital in the equities. A chunk of investment is directed towards large-cap companies with a small allocation to medium and small-cap companies.  

  3. Wealth Creation

     Kotak Bluechip Fund Direct Growth Plan is best suited for individuals who want to amass wealth by the process of compounding. An investor with a small amount of Rs.1 000 invested five years ago would have grown to Rs.3,380 at a return percentage of 15%. The Bluechip fund is tailor-made for long-term investors with a keen desire to become wealthy and financially independent.

  4. Credibility

    Kotak Bluechip Fund is one of the highly-rated funds in the country due to its spectacular track record and an efficient team of stock pickers and researchers. The fund managers have their skin in the game and have managed market turmoil and market corrections to the benefit of its unit holders. The fund house researches several macroeconomic factors and global issues to predict the market's sentiments, ensuring the readiness of the upcoming market scenario.

Who Should Invest in Kotak Bluechip Fund?

The fund is designed for long-term investors with a risk appetite. Kotak Mutual Fund and its team of professionals recommend a three to the five-year horizon to gain from the investment. The unit holders must assess their risks and allocate the capital accordingly. The fund is also appropriate for working professionals who desire to retire with a large corpus in their kitty. 

The fund also offers a Systematic Investment plan for conservative investors to mitigate risk through the process of dollar-cost averaging, where the individual purchases the fund on a regular basis irrespective of the market sentiments. The unit holders need to invest a minimum of Rs.1000 every month to utilize the SIP plan effectively.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

Conclusion

Kotak Bluechip Fund is one of the popular mutual funds among the masses mainly for its ability to generate returns and enhance the capital gains for its unit holders. The fund house rated the blue-chip fund's risk as high because of its volatile nature. Therefore, it is highly recommended for patient and disciplined investors with a basic idea of investment.

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