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MNC Mutual Funds – Definition, Best Funds and Should You Invest in Them

Highlights

  • MNC mutual funds invest in stocks of multinational corporations and have done well over 7 years and above. Shall you invest in them?
  • Yes, but restrict it to 5-10% of your equity portfolio - Read this post to know the rationale behind the same

There is a category of mutual funds that invest in specific themes. These funds are known as thematic funds. MNC funds are a kind of thematic funds, let us understand these better.

What are MNC Mutual Funds?

As the name suggests, these are funds that invest in stocks of multinational companies (MNC) listed on the stock exchange. MNC mutual funds are open-ended equity funds and do not invest in Indian origin companies.

There are many global companies from various countries such as the US, Germany, the UK, Japan, South Korea, France, etc, who have subsidiaries in India. The parent company operates from the country of origin while the Indian business operates in India. These Indian businesses sell their goods and services in India and also export from India, thus generating revenue and profit.

Top Mutual Funds to Invest in Now

Like Indian companies, these MNC stocks follow the same set of rules and regulations. Some of the leading MNC companies listed in India are Nestle, Gillette, Colgate, Kansai Nerolac Paints, P&G Hygiene & Health care, Bosch, etc. Let us see the three best performing funds in this space.

Best Performing MNC Funds

Aditya Birla Sun Life MNC Fund

This fund is offered by Aditya Birla Mutual Fund. These are the key points to note:

  • This fund was launched on 22nd April 1994 and has delivered an annualized return of 17.78% since launch.
  • The benchmark of this fund is the Nifty MNC Index.
  • The current AUM is INR 3,393 crores.
  • The portfolio comprises 41 stocks with 19% in large-caps and 81% in mid and small-caps.
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SBI Magnum Global

This fund is offered by SBI Mutual Fund. These are the key points to note:

  • This fund was launched on 30th April 1994 and has delivered an annualized return of 13.36% since launch.
  • The benchmark of this fund is the Nifty MNC Index.
  • The current AUM is INR 3,461crores.
  • The portfolio comprises 39 stocks with 49% in large-caps and 51% in mid and small-caps.

UTI MNC Fund

This fund is offered by UTI Mutual Fund. These are the key points to note:

  • This fund was launched on 10th July1998 and has delivered an annualized return of 15.72% since launch.
  • The benchmark of this fund is the Nifty MNC Index.
  • The current AUM is INR 1,983 crores.
  • The portfolio comprises 42 stocks with 48% in large-caps and 52% in mid and small-caps.

Returns of MNC Funds

The table below shows the returns delivered by these funds in % terms in a regular plan.

Fund NameLast 3 YearsLast 5 YearsLast 7 Years
Aditya Birla MNC2.774.6116.01
SBI Global3.545.0314.89
UTI MNC3.484.8114.63

Should You Invest in MNC Mutual Funds?

As we can see from the above table, returns are not so good in the last 3 to 5 years which has been the case for most equity funds. But over the long term, 7 years and above, these funds have done well. All these funds have been around for the last 25 years and have delivered between 13-17% annualized returns that are superb returns. This is because most of the MNC companies have a very strong parentage, robust business models, high corporate governance and strong financials.

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We recommend investing a small portion of your equity portfolio (5-10%) in these funds. These are thematic funds and invest only in the MNC theme, so the choice of companies to invest is narrow for the fund manager. You should invest a major part of your equity portfolio in multi-cap funds that are more diversified. To know about the best multi-cap equity funds, you can read another post of ours- https://www.wishfin.com/mutual-fund/five-best-performing-multi-cap-funds-to-invest-in/

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