Kotak Technology Fund

Kotak Technology Fund has delivered a 1-year XIRR of -6.95%, significantly underperforming the category average of 14.1% and the NIFTY 50 benchmark's -2.37% CAGR over the same period. Over longer horizons, the fund's CAGR closely tracks the benchmark, with a 3-year CAGR of 2.84% matching the NIFTY 50, but it has consistently generated negative alpha across all periods, ranging from -0.52% (3Y) to -0.85% (15Y). The fund's recent calendar year returns show high volatility, with a -10.94% return in 2026 and -4.61% in 2025, following a strong 26.92% in 2024.

The fund exhibits a maximum drawdown of -28.59% with a duration of 561 days and has not yet recovered from this peak, indicating significant downside risk. Its average drawdown is -11.11%, and it has experienced one drawdown event exceeding 10%, reflecting the high volatility typical of sectoral funds. The Calmar ratio for 1 year is -0.0941, indicating poor risk-adjusted returns, as the fund's negative return is not compensated by its drawdown profile.

As a sectoral/thematic fund focused on technology, the portfolio is inherently concentrated in the technology sector, which limits diversification and increases vulnerability to sector-specific downturns. The fund's beta of 0.788 (1Y) suggests it is less volatile than the market, but its upside and downside capture ratios (84.96% and 88.0% respectively) indicate it participates less in market upswings and nearly as much in downswings, which is unfavorable. Specific top holdings are not provided, but the sector concentration is a key characteristic of this fund.

The fund significantly lags its category peers, with a 1-year XIRR of -6.95% versus the category average of 14.1%, a gap of over 21 percentage points. Over longer periods, the fund's CAGR is roughly in line with the benchmark but still underperforms the category averages, which are in the 16-17% range for 3-15 year horizons. This suggests the fund has not been able to capitalize on technology sector growth as effectively as its peers, and its performance consistency is poor given the negative returns in recent years.

This fund is suitable only for investors with a very high risk tolerance and a long-term investment horizon (at least 7-10 years) who can withstand significant drawdowns and volatility. It is not appropriate for conservative investors or those seeking stable returns, given the fund's negative returns, high drawdowns, and underperformance relative to both the benchmark and category. Investors should be prepared for the possibility of prolonged recovery periods, as evidenced by the current unrecovered drawdown lasting over 1.5 years.

• The fund has a lower beta (0.788) than the market, indicating reduced volatility relative to the NIFTY 50.
• It has shown the ability to deliver strong returns in favorable years, such as a 26.92% return in 2024.
• The expense ratio of 0.88% is reasonable for a sectoral fund, and the direct plan option helps reduce costs.

• The fund has delivered negative 1-year XIRR of -6.95%, far below the category average of 14.1%, and has underperformed the benchmark with negative alpha across all time periods.
• The maximum drawdown of -28.59% with no recovery yet indicates significant downside risk and a long recovery period, making it unsuitable for risk-averse investors.