The Hindu Business Line : We do not plan to alter Kotak Tech's mandate: Sandesh Kirkire

Investors, feels Mr Sandesh Kirkire, CEO, Kotak Mahindra MF, need to see the latest drop in equity prices as impassively as possible. "There are lessons to be learnt... you can not expect the market to go up and up forever", he says.

Excerpts

Some of your equity funds had significant exposure to metal stocks, which have now taken a knock. Your comments.

It is true that funds like Kotak 30 and Kotak Contra have holdings such as Tata Steel and Sterlite.

Our investments in metals have reflected what we have felt about the sector.

That view has not changed much, the recent decline in metals notwithstanding.

Kotak Contra, in fact, had its exposure to metal scrips since its early days. The point I am making here is that metals should continue to see good demand in the days to come. This is in context of the kind of growth we expect to see in the economy.

Higher spending on infrastructure projects, for instance, should prove to be beneficial for steel companies.

How much cash are you holding at the moment?

It is not that we are sitting on a big pile of cash, ready to be put into use once the market consolidates or touches a certain low. The equity funds in our stable have cash components all right, but these are part of specific strategies.

Kotak 30, for instance, has lately scaled up its cash position a bit. Please appreciate that being fully invested when the market is looking up has its merits. Investors would not want us to do otherwise when the indices are rising.

Is Kotak Lifestyle, your latest equity offer, sufficiently invested too?

Here, we have tried to deploy the assets optimally. The end-May holding statement will tell you exactly what we have included in its portfolio. The fund has picked up companies that are set to gain from advancing lifestyle and renewed consumerism in India.

What will happen to Kotak Tech? Will you make it more broadbased?

No, we do not plan to alter its mandate. The fund will aim at those who wish to take a call on technology. Its NAV, I admit, is still visibly low, which probably leads to the question being raised here.

However, it is also true that a few other tech funds have been in the past changed into more diversified products.

What is your reading of the upheaval in the equity market?

The equity investor can never rule out volatility. In fact, markets go up and down because liquidity levels change for the good or for the worse. Having said that let me suggest that the most recent decline should be seen in the backdrop of certain technical issues.

The fundamental equations that held true for this country have not really changed. We are still a growing economy, marked by strong domestic demand. So, it is not right to suggest that the basic ingredients have disappeared overnight.

Lastly, any new launches...

Yes, we have designed a couple of close-ended products. These are expected to have a good number of takers. Investors, I feel, should be given a variety of options to choose from. Availability of a wide range of schemes will ultimately help in producing superior asset allocation.

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