Riding India’s Growth Curve: Kotak Business Cycle Fund Review for Long-Term Investors
Brokerage Free Team •June 25, 2025 | 4 min read • 471 views
Brokerage Free Team •June 25, 2025 | 4 min read • 471 views
As the Indian economy moves through its natural cycles of growth, correction, and recovery, smart investors are shifting focus from static asset classes to macro-driven thematic investing. One such standout strategy is the Kotak Business Cycle Fund — a fund that aligns itself with India’s economic momentum by rotating investments across sectors best suited to each phase of the business cycle.
Launched by Kotak Mahindra Asset Management, this equity scheme is designed for long-term capital appreciation by tracking and capitalizing on shifts in the Indian and global macroeconomic environment. Here’s an in-depth look at how it works, what it holds, and why it’s gaining investor interest.
Business cycles define the rhythm of an economy. Smart investing means understanding and aligning with these rhythms. Here's a snapshot of how the cycle affects sectors:
Phase | Economic Signals | Sectors That Shine |
---|---|---|
Expansion | Growth in GDP, rising consumption | Financials, Capital Goods, Infra |
Peak | Rising inflation, tight monetary policy | Energy, Metals, Commodities |
Contraction | Demand slowdown, lower investments | FMCG, Pharma, Utilities |
Trough/Recovery | Stabilization and government stimulus | Auto, Financials, Industrials |
Kotak Business Cycle Fund uses macro indicators—like GDP trends, inflation, credit growth, and interest rate direction—to tactically shift exposure across these sectors.
Attribute | Details |
---|---|
Launch Date | September 28, 2022 |
Fund Managers | Harish Krishnan, Abhishek Bisen |
Fund Type | Thematic Equity (Open-Ended) |
Benchmark | Nifty 500 TRI |
AUM (May 2025) | ₹2,728.93 crore |
NAV (24 June 2025) | ₹15.96 (Regular), ₹16.66 (Direct) |
Expense Ratio | 1.95% (Regular), 0.63% (Direct) |
Exit Load | 0.5% if redeemed within 90 days |
Here’s how the fund has performed:
Duration | Regular Plan | Direct Plan |
---|---|---|
1-Year CAGR | 7.33% | 9.14% |
Since Inception | 18.43% | 20.19% |
📌 Source: Moneycontrol, ValueResearch, Kotak AMC. Past performance is not a guarantee of future results.
Large-Cap: 46.0%
Mid-Cap: 26.5%
Small-Cap: 25.7%
Sector | Weight (%) |
---|---|
Financial Services | 20.1% |
Industrials | 15.2% |
Healthcare | 15.1% |
Consumer Cyclical | 14.4% |
Consumer Defensive | 8.8% |
Others/Cash | 26.4% |
ICICI Bank – 4.93%
Bharti Hexacom – 4.24%
Aster DM Healthcare – 3.57%
Axis Bank – 3.39%
Godrej Consumer – 2.94%
According to Kotak’s official factsheets:
Beta: 0.95 (Market sensitivity)
Sharpe Ratio: 0.98 (Direct) — indicates strong risk-adjusted returns
Standard Deviation: 14% — moderate to high volatility
This makes it best suited for investors who are comfortable with cyclical exposure and are investing for the long term.
Assuming a 12% annual return, here’s how your investment could grow:
Total Invested | ₹6,00,000 |
---|---|
Maturity Value | ₹11,62,000 |
Total Gain | ₹5,62,000 |
Even through economic downturns, the dynamic approach of this fund helps cushion volatility and capitalize on recovery phases.
Fund Name | 1Y Return | AUM (₹ Cr) | Expense | Sharpe |
---|---|---|---|---|
Kotak Business Cycle Fund | 9.14% | 2,728.93 | 0.63% | 0.98 |
ICICI Prudential Business Cycle | 8.71% | 3,520 | 0.75% | 0.91 |
Aditya Birla SL Business Cycle | 8.25% | 2,150 | 0.82% | 0.87 |
Investors with a 5–7+ year investment horizon
SIP investors looking for cyclical wealth creation
Those seeking an alternative to static equity funds
Investors who understand or appreciate macro-trend investing
Not ideal for:
Short-term investors
Those uncomfortable with sectoral concentration or volatility
“Business cycle investing is about timing sectoral trends, not just individual stocks. Our focus is on using top-down macro filters to dynamically position the fund for long-term performance.”
— Harish Krishnan, Fund Manager, Kotak AMC
The Kotak Business Cycle Fund is a strong choice for those who want a strategic, active approach to equity investing—especially in a growing and structurally reforming economy like India.
Smart sector rotation with macro insights
Strong since-inception returns (20.19% Direct)
Actively managed with proven research team
Sensitive to economic timing errors
Requires patience during sideways markets
If used wisely—preferably via SIPs—this fund can be a powerful long-term engine in your wealth-creation journey.
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