The Kotak Business Cycle Fund has marked its third anniversary since its September 2022 launch, showcasing impressive performance and growth. As of August 31, 2025, the fund has amassed assets under management (AUM) exceeding ₹2,900 crore, reflecting strong investor confidence.

Performance Highlights

The fund has delivered a robust compound annual growth rate (CAGR) of 20.77%, outpacing its benchmark, the Nifty 500 TRI, which returned 18.23% over the same period. This outperformance underscores the fund's effective investment strategy and management.

To illustrate the fund's growth potential, consider these scenarios:

The monthly SIP scenario assumes ₹10,000 invested each month over the three-year period.

Fund Strategy and Management

The Kotak Business Cycle Fund is managed by Harish Bihani and Abhishek Bisen. The fund employs a business cycle-based investment approach, utilizing dynamic asset allocation across various sectors. This strategy allows the fund to adapt to changing market conditions and capitalize on opportunities arising from different stages of the business cycle.

Key Metrics

Here are some important metrics that provide insight into the fund's performance and risk profile:

The Sharpe ratio being under 1.00 suggests that the fund's returns may not fully compensate for the level of risk taken. However, the Beta below 1.00 indicates that the fund may be less volatile than the market. The standard deviation of 13.45% provides a measure of the fund's volatility, while the portfolio turnover ratio of 31.69% suggests a moderate level of trading activity within the fund.

Investors should consider these metrics along with their personal financial goals and risk tolerance when evaluating the Kotak Business Cycle Fund as a potential investment option. As always, past performance does not guarantee future results, and it's advisable to consult with a financial advisor before making investment decisions.

The Kotak Business Cycle Fund has demonstrated impressive performance since its inception in September 2022, delivering robust returns and outpacing its benchmark index. The fund's strategic approach to investing based on economic cycle phases has yielded significant gains for investors.

Strong Performance Metrics

The Kotak Business Cycle Fund has achieved a remarkable 18.39% compound annual growth rate (CAGR) since its launch in September 2022. In the past six months alone, the fund has generated over 8% in absolute returns, surpassing the performance of its benchmark, the Nifty 500 TRI.

Outperformance and Alpha Generation

Notably, the fund has posted a 6.1% alpha over its benchmark in the past year, marking the highest alpha in its category. This outperformance underscores the fund's ability to generate excess returns compared to its benchmark index.

Investment Strategy

The Kotak Business Cycle Fund operates on a unique strategy of investing based on economic cycle phases. This approach involves rotating across various sectors and market capitalizations to capitalize on different stages of the economic cycle.

Recent Portfolio Adjustments

The fund managers have made significant adjustments to the portfolio in recent times:

• Increased healthcare exposure from 5% to 14%
• Reduced IT sector allocation from 8% to 3%

These changes reflect the fund's dynamic approach to asset allocation in response to evolving economic conditions.

Assets Under Management Growth

The fund's assets under management have seen substantial growth, aligning with the broader interest in business cycle funds. This trend is evident across the category, with the top three schemes in the business cycle fund category delivering strong returns.

Market Analyst Perspectives

Market analysts have noted that the business cycle fund strategy offers flexibility and potential for outperformance. However, they also caution that this approach can lead to underperformance if economic shifts are misjudged.

Investor Considerations

Given the nature of the fund's strategy, market analysts suggest that it may be most suitable for investors with at least a five-year investment horizon. This longer-term perspective allows for the fund to navigate through various economic cycles and potentially deliver superior returns.

The Kotak Business Cycle Fund's performance highlights the potential benefits of a sector rotation strategy based on economic cycles. However, as with all investments, past performance does not guarantee future results, and investors should carefully consider their risk tolerance and investment goals before making investment decisions.