Mutual fund analysis

I am taking up an open ended mutual fund
Kotak opportunities fund (G)
The asset size of this fund is Rs 700 crores as on 31st march 08 and the minimum investment in this fund is Rs 5000.
The fund has generated a negative return during the quarter ended 31st march to the tune of 30%. This is but natural keeping in mind the huge market fall during the same period. The fund generated an annual return of 86% during the year 2007.
Here are the details of the portfolio held as on 31st march 2008


Equity /value( Rs crs) /Quantity %
Relinace industries 30.59 /135,000/ 4.37
larsen and tubro 21.25/ 70,000/ 3.03
Bharti Airtel 19.98/ 241,800/ 2.85
ITC 18.98/ 9,20,000 /2.71
HDFC 4.00 /2.63
Infrastructure Development Finance Company 17.21/ 1140,000 /2.46
Tata Consultancy Services 17.02/ 210,000 /2.43
Aditya Birla Nuvo 16.75/ 120,000/ 2.39
Jindal Steel & Power 16.56/ 80,000/ 2.36
State Bank of India 16.31/ 101,950 /2.33
Welspun Gujarat Stahl Roh 15.33/ 400,000/ 2.19
Crompton Greaves 15.19 /551,619 /2.17
Axis Bank 15.01/ 190,000 /2.14
Tata Chemicals 14.90/ 531,209/ 2.13
Maruti Suzuki India 14.06 /170,000/ 2.01
Ranbaxy Laboratories 14.03 /320,000/ 2.00
Reliance Capital 13.62/ 110,850/ 1.94
Sterlite Industries (India) 13.58 /190,000/ 1.94
United Spirits 13.52/ 90,000 /1.93
ICICI Bank 13.46 /175,000 /1.92
JSW Steel 12.97 /158,258/ 1.85
Punj Lloyd 12.43 /400,000/ 1.77
Infosys Technologies 12.24/ 85,000/ 1.75
IVRCL Infrastructure and Projects 12.17 /300,000/ 1.74
Aban Offshore 12.06 /40,000 /1.72
Steel Authority of India 12.04 /650,000/ 1.72
Glenmark Pharma 11.46/ 234,300/ 1.64
Satyam Computer Services 11.10 /280,000 /1.58
Pantaloon Retail 10.97 /257,068 /1.57
Nagarjuna Construction Co. 10.74/ 500,000/ 1.53
Reliance Communications 10.70/ 210,000 /1.53
Bank Of India 10.70/ 422,500/ 1.53
Hindustan Petroleum Corporation 10.26 /400,000 /1.46
Jaiprakash Associates 9.63/ 425,000/ 1.37
Canara Bank 9.00/ 400,000/ 1.29
Balrampur Chini Mills 8.89 /1100,000 /1.27
Housing Development and Infrastructure 8.87 /135,000 /1.27
Century Textiles and Industries 8.73/ 120,000 /1.25
Patel Engineering Company 8.71 /142,550 /1.24
DLF 8.59/ 133,000/ 1.23
ABG Infralogistics 8.00 /206,381/ 1.14
Godrej Industries 7.63/ 295,000/ 1.09
Lanco Infratech 7.38 /190,000 /1.05
Indiabulls Real Estate 7.32 /150,000 /1.05
GVK Power & Infrastructure 6.89/ 1719,560 /0.98
Television Eighteen 5.79 /146,195 /0.83
Reliance Energy 5.75 /46,000 /0.82
Ballarpur Industries 5.64 /2028,570 /0.81
Hindustan Construction Company 5.56 /420,000 /0.79
Future Capital Holdings 5.12/ 80,000/ 0.73
Mundra Port and Special Economic Zone 3.76/ 65,000 /0.54
Indiabulls Securities 3.03 /115,000 /0.43
Rural Electrification Corporation 2.33 /219,205 /0.33
Adlabs Films 1.84 /30,000/ 0.26
Term deposits /Rs cr/ %
Kotak mahindra bank 8.50 /1.21
Money market instruments
icici bank 12.74/ 1.82
karur vysya bank 4.92/ 0.70
State bank of pataila 14.87 /2.12
indian bank 4.93 /0.70

The portfolio as one can see is an agressive one and has been able to earn a good return in a bull market but this portfolio may not prove to be good one in the current market as there is lack of defensive stocks which can beat the downturn in the market. The portfolio is having a large chunk in the infra sector which would continue to grow over the long term even if we see a lower target of around 7 -8% for the GDP growth. However a heavy exposure to the banking sector is a cause of concern due to the derivatives writedowns expected and a tightning monetory policy by the RBI to contain inflation. Similarly investments in iron and steel are also likely to give negative returns in the near future. If one wants to invest in this mutual fund one should wait for the quarterly numbers and RBI policy and let the NAV adjust itself to their impact. Only then one should consider investing in this fund which i feel would be available at a lower level by the end of this month.