HDFC MF launches MNC fund that offers portfolio diversification opportunities

• The mutual fund product will provide investors with an opportunity to diversify their portfolio with exposure to multinational companies.
• The fund house said that due to a unique combination of good corporate governance, trusted brands, focus on innovation and strong balance sheets, MNCs have longevity.
• The fund will follow a bottoms-up approach with a focused strategy of maximum 30 stocks.
• The scheme will be benchmarked against NIFTY MNC TRI (Total Returns Index).

HDFC Asset Management Company has launched HDFC MNC, an open ended equity scheme following multinational company (MNC) theme.

The mutual fund product will provide investors with an opportunity to diversify their portfolio with exposure to multinational companies that are resilient during bouts of volatility.

The fund house said that due to a unique combination of good corporate governance, trusted brands, focus on innovation and strong balance sheets, MNCs have longevity.

“MNCs generally provide a unique combination of innovation and brand creation. They have access to superior products and technology due to R&D focus of parent companies. This allows them to focus on brand creation,” said HDFC AMC in a fund presentation.

The management said that the fund will invest in Indian companies that have a global presence of more than decade and are selling products consumed all over India.

Dove, Tide, Kitkat, Vicks, Colgate etc are examples of well known brands with strong presence in everyday life that offer good investment opportunities, said the fund house.

“MNCs tend to have a good track record of free cash flow generation and high dividend payout. Strong profitability and superior capital allocation track record results in consistently higher return ratios, thereby aiding wealth creation,” added the fund house.

During periods of market downswings like tech bubble, global financial crisis, covid and geopolitical uncertainty, NIFTY MNC Index has managed to protect downside better than the broader market like Nifty 500, shows data shared by HDFC AMC.

The fund will follow a bottoms-up approach with a focused strategy of maximum 30 stocks. The scheme will be benchmarked against NIFTY MNC TRI (Total Returns Index).

The new fund offer (NFO) will open for subscription from February 17 and will close on March 3 and the scheme will be managed by senior fund manager Rahul Baijal. The minimum subscription amount for investment in the scheme is ₹100 per application and any amount thereafter.


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