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Kotak Fund's Secret: Low Cash, High Returns
10 Feb
Summary
- Kotak Flexicap Fund achieved 10.42% return in one year.
- Fund maintained minimal cash, 1-3% holdings.
- Category average return was 6.82% with higher cash.
Kotak Flexicap Fund demonstrated superior performance by keeping its equity exposure high, achieving a 1-year return of 10.42%. This significantly outpaced the Flexicap category average return of 6.82% as of December 31, 2026. The fund's strategy involved maintaining minimal cash reserves, typically between 1-3%.
This contrasts with the broader Flexicap category, which saw its top funds by AUM hold an average of around 7% cash. While higher cash levels can offer protection during market downturns, they may lead to underperformance when markets trend upwards.
Industry experts note that consistently timing the market with cash calls is difficult. Funds that remain more invested tend to capture market gains more effectively, as demonstrated by Kotak Flexicap Fund's performance. This approach allows for greater participation in upward market movements, though it may increase exposure to short-term volatility.
