Kotak Contra Fund Regular Plan Growth Benefits

Kotak Mahindra Contra Fund Regular Plan Growth Benefits

Kotak contra fund is just at that juncture. This fund is based on a bottom-up, contrarian investing strategy that focuses on buying stocks that are trading at a discount, but could be strong long-term investments.

This Regular Plan Growth plan, managed by Kotak Mahindra Asset Management Company Limited, is suitable for investors looking for long-term capital growth, who wish to take advantage of fund management professionals’ expertise.

If the choice of investing in quality stocks, which are out of favour at present, is considered to be a good way to create wealth, then this article will give you an idea about how the Kotak contra fund works and if it is a good addition to your investment portfolio.

What Makes a Contra Fund Different?

Picture doing some shopping at a sale at a festive time. You delay buying products to a lower price because there are quality products on sale. The concept of contra investing is the same as that of the above.

A contra fund is a fund that invests in companies that are not performing well on the market, but are considered a solid stock by a contra fund. With improved market sentiment over time, these companies could make a comeback, with the potential for earnings to be very good.

Whereas the momentum investing involves the concept of ‘buy and hold’, contra investing is about ‘Wait and See’ which means being patient, researching, and investing in the long term.

About Kotak Mahindra Asset Management Company Limited

Company Overview

Kotak Mahindra Asset Management Company Limited is one of the well-established asset management companies in India. It has a wide variety of mutual fund plans that can cater to different financial objectives and investors’ tastes.

It’s an investment style that involves extensive research, disciplined portfolio management and risk management.

Investment Philosophy

The fund house’s philosophy is to find well-run companies with long-term growth prospects, but to have a disciplined investment process.

What Is Kotak Contra Fund?

The Kotak contra fund is an equity oriented mutual fund, which takes an investment approach which is contrary.

The fund manager doesn’t buy into the most popular companies; instead he/she seeks companies that seem to be undervalued due to some temporary market conditions or negative sentiment regarding the business.

The goal is very straightforward:

Make investments in quality businesses.
Hold investments patiently.
Take advantage of the creation of value over the long-term.

Fund Objective

The fund’s main goal is to achieve long-term capital growth through an investment approach that emphasizes the purchase and holding of primarily equity- and equity-related securities and that is characterized by an investment philosophy that is contrarian.

A mutual fund’s strategy is to build up wealth over time, but it is not guaranteed since mutual fund investing is a market risk.

Investment Strategy

Contrarian Investing

The fund manager looks for businesses that could be lacking in some areas of performance, but have strong financials and growth opportunities.

Long-Term Perspective

The investment method is not just about responding to their short-term market changes, but primarily on the long-term growth potential of businesses.

Key Features of Kotak Contra Fund Regular Plan Growth

Diversified Equity Portfolio

The fund invests in various sectors and industry, thus minimizing the risk of being over-reliant on one sector of the economy.

Professional Fund Management

Experts in the field constantly invest in research on companies, valuations and rebalancing the portfolio, if needed.

Growth Option

The Growth option reinvests profits back into the scheme, rather than distributing them to the investors, and aids in the power of compounding over the years.

How Does Kotak Contra Fund Work?

The money manager is always looking for others ways of earning money.

Step 1: Research

The criteria used to value companies include their business quality, management, earnings forecast, and their price.

Step 2: Investment

Shares with a value lower than the actual value can be included in the portfolio.

Step 3: Monitoring

The Portfolio is reviewed on regular basis to keep the investments in line with the objective of the fund.

Step 4: Rebalancing

The portfolio is subject to change as a result of the changes in the market conditions and value opportunities.

Benefits of Investing in Kotak Contra Fund

Potential for Long-Term Wealth Creation

Purchasing good businesses at a good price could enhance the chance for capital appreciation.

Opportunity Beyond Market Trends

By investing in the market, Contra investing enables investors to take advantage of opportunities which are not necessarily noticed by others.

Diversification

The portfolio tends to be diversified among a number of areas, thereby minimizing concentration risk.

Professional Expertise

Kotak Mahindra Asset Management Company Limited research and experience is beneficial for investors.

Power of Compounding

The Growth option will automatically reinvest any earnings, which will allow the wealth to mount over time.

Who Should Invest in Kotak Contra Fund?

The following is a list of classes for which this fund might be appropriate:

Have a longer time frame investment goal.
Is able to take market fluctuations in the equities.
Seeking to learn about a bear market investing approach.
Look for capital appreciation in the long-term.
Like to have a professional fund management.

Investment Horizon

When investing against the trend, it means that you’ll have to be patient.

Investors should prefer to hold the investments for at least five years or more since an undervalued company may not be able to recognize its potential, in a timely manner.

Risks Associated with Kotak Contra Fund

All equity mutual funds have risks associated with them.

The following are some possible hazards:

Market volatility
Economic uncertainty
Sector-specific challenges
Company-specific risks
Changes in investor sentiment are likely to be the most critical factors.

Having a good idea of these risks assists investors to make decisions.

Why Choose Kotak Mahindra Asset Management Company Limited?

The following is a list of some of the reasons investors would want to invest in this fund house:

Experienced investment professionals
Strong research capabilities
Mutual funds that have multiple funds.
Disciplined investment process
Invest for long term wealth creation.

Taxation on Kotak Contra Fund

As equity oriented mutual fund, capital gains tax in general is based on the holding period, and the tax regime in force when redemption is made.

For investors, consult a tax expert to give you advice depending on your personal financial position.

How to Invest in Kotak Contra Fund Through Retail Pe

It’s now easy to invest online.

Retail Pe offers investors the following:

Complete digital registration.
Discuss about the schemes of mutual funds available.
Choose Kotak contra fund Regular Plan Growth.
Invest in either SIP or lump sum investment.
Avoid any incomplete transactions and ensure they are done securely.
Provide instant updates on investments on the platform.

Conclusion

The Kotak contra fund is a great way for investors to get involved in a disciplined approach to investing that is based on finding underpriced companies with growth prospects over the long-term. The Regular Plan Growth option could be a good choice for investors who wish to invest for the long term and trust the Kotak Mahindra Asset Management Company Limited, expertise in managing the fund.

FAQs

1. What is the Kotak Contra Fund?

Ans) The Kotak contra fund is equity mutual fund, which invests in undervalued companies and is a buy and hold fund.

2. Who manages the Kotak Contra Fund?

Ans) Kotak Mahindra Asset Management Company Limited is the fund manager of the fund. The Kotak Mahindra Asset Management Company Limited is a leading asset management company in India which is managing the fund.

3. Is the Kotak Contra Fund suitable for long-term investment?

Ans) Yes. It is usually for investors who have long term investment horizon and can withstand the volatility of the equity markets.

4. Can I invest in the Kotak Contra Fund through SIP?

Ans) Yes. Investors have the option to invest in a Systematic Investment Plan (SIP) or make a lump sum investment, based on their investment objectives.