Kotak Mutual Fund has introduced a novel investment vehicle, the Kotak Active Momentum Fund, which takes a distinctive approach to momentum investing by focusing on earnings momentum rather than the traditional price momentum strategy.

Innovative Strategy

The fund's strategy, as explained by fund manager Rohit Tandon, centers on selecting stocks based on three key factors:

1. Earnings revisions
2. Analyst ratings
3. Fundamental strength

This approach aims to capitalize on companies showing strong earnings momentum, which could potentially lead to superior returns.

Impressive Backtesting Results

The fund's proprietary Earnings Momentum model has demonstrated promising results in backtesting:

These figures suggest that the model has consistently outperformed its benchmark over the tested period.

Current Portfolio Composition

The Kotak Active Momentum Fund's current portfolio allocation reveals:

• Highest weightings in financials, industrials, and materials sectors
• Average exposure of 57.00% to mid-cap stocks
• Average exposure of 39.00% to large-cap stocks

This allocation indicates a balanced approach between the stability of large-caps and the growth potential of mid-caps.

Market Outlook

Rohit Tandon, the fund manager, expressed a positive outlook on several sectors for medium-term growth:

• Healthcare
• Consumer durables
• Financial services

Risk Factors

Tandon also highlighted key market risks:

1. Economic slowdown
2. Geopolitical tensions
3. Technological obsolescence

Investors considering this fund should weigh these potential risks against the fund's innovative strategy and historical backtesting performance.

The launch of the Kotak Active Momentum Fund represents a fresh approach in the momentum investing space, potentially offering investors an alternative way to capture market opportunities driven by earnings growth rather than price trends alone.

Kotak Mahindra Asset Management Company has introduced a new offering in the equity mutual fund space with the launch of the Kotak Active Momentum Fund. This open-ended equity scheme follows a momentum investing approach with a unique focus on earnings growth.

Key Features of the Fund

• The fund aims to target stocks with strong earnings growth using an in-house model.
• It combines earnings and sales growth metrics with analyst ratings to select stocks.
• The portfolio will consist of 40-50 stocks chosen from the top 250 companies by market capitalization.
• Regular rebalancing will be carried out to maintain the momentum strategy.

Subscription Details

• The scheme opens for subscription from July 29 to August 12, 2025.
• Minimum investment amount is set at ₹5,000.00.

Management Insights

Nilesh Shah, Managing Director of Kotak Mahindra Asset Management, emphasized the fund's focus on earnings rather than price trends alone. He stated, "Earnings have historically outperformed price across market cycles."

Fund Manager Rohit Tandon highlighted the combination of investment strategy and data science in the fund's approach, indicating a blend of traditional and modern investment techniques.

About Kotak Mahindra Asset Management

• Operating since 1998
• Manages over 72.88 lakh investor folios
• Operates 106 branches across 95 cities

The launch of the Kotak Active Momentum Fund represents a strategic move by Kotak Mahindra Asset Management to capitalize on the momentum investing strategy while incorporating a strong focus on company earnings. This approach aims to provide investors with a potentially robust option in the equity mutual fund category.