Kotak Multicap Fund Regular Payout Inc Dist cum Cap Wdrl INF174KA1HT7

Kotak Multicap Fund earns a High Process Pillar rating.

The leading factor in the rating is its parent firm's superior long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.4 stars. The parent firm's five-year risk-adjusted success ratio of 67% also strengthens the process. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. Their impressive success ratio suggests that the firm does well for investors and that this fund may benefit from that. The stability of talent across its parent firm further contributes to the process. The firm's asset-weighted manager tenure of 14 years demonstrates its ability to retain portfolio managers.

This strategy tends to hold smaller, deeper value companies compared with its average peer in the Multi-Cap Morningstar Category. Examining additional factor exposure, this strategy has continually had more high-yield exposure than the Morningstar Category average during recent years, with the portfolio holding more stocks with high dividend or buyback yields. High-yield stocks tend to be associated with more mature, profitable businesses that can grow as well as provide a stream of income. Such stocks could suffer, however, if setbacks force them to cut their dividends. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. This strategy has also exhibited a tilt toward high-volatility stocks over these years, meaning it has invested in companies that have a higher historical standard deviation of returns. Such exposure tends to pay off when markets are hot and to be costly when they are not. Compared with category peers, the strategy also had more exposure to the Volatility factor in the most recent month. Given the high trading volume of holdings, this fund also tilts toward liquid assets. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. Nevertheless, the fund's Liquidity exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in communication services and consumer cyclical relative to the category average by 4.7 and 3.9 percentage points, respectively. The sectors with low exposure compared with category peers are healthcare and industrials, underweight the average by 5.4 and 3.8 percentage points of assets, respectively. The portfolio is positioned across 69 holdings and is relatively top-heavy. Of the strategy's assets, 33.9% are concentrated within the top 10 holdings, compared to the typical peer's 28.1%.